This article is part of our 10-part series on Oracle’s Cloud Infrastructure (OCI). In this article, we will go over a few important areas that can have a major impact on the economics of an OCI journey. Whether you end up optimizing your OCI investment while managing Oracle licensing risk depends, at least in part, on successfully navigating these topics as you plan and implement an OCI strategy.

Licensing.
When we talk about Oracle licensing in Oracle Cloud Infrastructure, we are essentially referring to covering license requirements for traditional on-premise Oracle programs installed or provided in OCI. For example, in OCI Compute, you can have VMs with Oracle Database EE or WebLogic Suite. These would need to be licensed one way or the other. Broadly, Oracle provides two avenues for licensing in OCI – Bring Your Own License (BYOL) and License Included (LI).

Understanding Licensing in Oracle Cloud Infrastructure (OCI)

When using Oracle Cloud Infrastructure (OCI), licensing typically applies to two key services: OCI Compute and OCI Database Cloud Services (DBCS). Customers can choose between two licensing options: Bring Your Own License (BYOL) and License Included (LI).

1. Bring Your Own License (BYOL)

BYOL allows customers to use their existing Oracle licenses for OCI deployments, providing cost-efficiency and flexibility.

• Example Scenario:
  Imagine deploying an OCI Compute VM with 2 OCPUs (2 Xeon-based physical cores). You install Oracle Database Enterprise Edition (DBEE) on the VM and cover the license requirement using your existing DBEE licenses.
  • You will only pay the base hourly rate for running the VM.
  • Ensure you have at least 1 “Processor” license for DBEE, as OCI equates 1 OCPU to 1 physical core (e.g., 2 OCPUs = 1 “Processor” license).
• Key Points:
  • BYOL extends to any DB options/packs and other software like WebLogic or SOA Suite installed on the VM.
  • It also applies to DBCS offerings, including DBCS VMs, DBCS Exadata, and other related services.
• Benefits:
  • Leverages existing Oracle investments.
  • Provides flexibility to redeploy licenses on-premise or with other cloud vendors.
• Challenges:
  • Requires monitoring and tracking of license usage, as OCI does not enforce license compliance.
  • Existing licenses must be under active Oracle Support, which incurs ongoing costs.
  • Support Rewards can help offset some costs, but customers cannot reduce their annual support spend even if license needs decrease.

Tip: Refer to the Oracle PaaS and IaaS Universal Credits Service Descriptions document (page 22) for detailed BYOL guidelines.

2. License Included (LI)

As the name suggests, the License Included model incorporates the license cost into the hourly rate for OCI services.

• Example Scenario:
  When launching a DBCS VM with DBEE under the License Included option, the license cost is part of the hourly rate. You do not need to purchase separate licenses.
  • Available for various OCI Compute services, including pre-configured WebLogic Suite images from the OCI Marketplace.
• Key Points:
  • Eliminates the need for separate license tracking and monitoring.
  • Ideal for workloads with fluctuating usage.
• Benefits:
  • Simplifies licensing by including costs in service rates.
  • Costs scale with workload usage, reducing financial commitment for unused resources.
• Drawbacks:
  • Higher hourly rates compared to BYOL.
  • Less flexibility as workloads cannot be moved on-premise or to other cloud vendors.

Choosing Between BYOL and License Included

License Included suits businesses that prefer simplified licensing and lower upfront commitments.

BYOL is best for customers with existing licenses seeking flexibility in deployment options.

OCI Discounts.
Oracle’s standard prices apply to all of their regions. As such, pricing and discounts are easy to assess. As of June 2022, Oracle’s standard OCI discounts are as follows. Note that these do not apply to default On-Demand contracts and require a FAM or AUC contract with a spend commitment:

OCI Spend (Annual)	Discount
< $100k	0%
$100k-$500k	5%
$500k-$1M	10%
$1M-$5M	15%
$5M-$10M	20%
>$10M	25%

Generally, the discounted prices will be reflected in your OCI agreement rate card.

Support Rewards Program:
One of the major issues for Oracle customers is reducing their annual Oracle Support spend, with no flexible way of doing that. The Support Rewards essentially helps offset some of the Support spend based on the annual OCI spend. For every $1 customers spend on OCI, they get a 25% reduction in their Support spend. The reward is 33% for ULA customers. So suppose your annual Oracle Support bill is $100k, and you have $200k in OCI spend. You will be entitled to a total support reward of $50, thereby reducing your annual support down to$50k.

The Key Takeaway.
When planning an OCI contract, assessing the overall economics and value performance has several key inputs and considerations. Having a clear plan around BYOL and License Included, factoring in the correct discount and calculating the Support Rewards is critical in correctly assessing OCI’s economic value. In my experience, the Support Rewards calculation alone can tip the balance from a competing AWS offer to OCI.

As always, feel free to contact us for a complimentary consultation. Contact Us.