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.

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). Commonly, the licensing implication applies to OCI Compute and OCI DBCS services, with BYOL and LI options available in each (as of June 2022).

BYOL licensing basically allows customers to leverage their existing Oracle license investment and apply it to OCI deployments. For example, suppose an OCI Compute VM with 2 OCPUs (that’s 2 Xeon-based physical cores). Suppose further that you install Oracle Database EE in this VM and you decide to cover the DBEE license requirement with existing DBEE licenses you own. In this case, you will pay the base, hourly OCI hourly rate for running the VM only. Additionally, you will need to ensure you have at least 1 “Processor” license for DBEE. This because in OCI, 1 OCPU is equal to 1 physical Xeon or x86 equivalent core; 2 OCPUs require 1 “Processor” license. The BYOL requirement will apply to any DB Options/Packs as well. The same concept applies to anything else you install in the OCI VM, like WebLogic, SOA Suite, etc.The BYOL concept also applies to OCI’s Database Cloud Service (DBCS), including DBCS VMs and DBCS Exadata, and other DBCS services. Generally, when creating DBCS resources, you have the option to choose between “BYOL” and “License Included”.

The main benefit of BYOL is that it allows customers to leverage their existing Oracle investment while simultaneously retaining the flexibility to redeploy or “move” the licenses to other deployments, like bringing them back on-premise or moving to other cloud vendors. The downside is that customers are still required to monitor and track their license consumption. Remember, OCI does not “check” if you have sufficient licenses! You must monitor this on your own. Additionally, those existing licenses must be under active Oracle Support, and incur that ongoing Support cost. Fortunately, Oracle’s Support Rewards program helps alleviate that to some extent (more on that below). BYOL does reduce flexibility in another way – customer’s cannot reduce their annual support spend, and hence their overall Oracle spend, if their license need decreases. This is not a problem with the License Included model below. For more on BYOL licensing, this is required reading: Oracle PaaS and IaaS Universal Credits Service Descriptions document (page 22).

License Included, as the name suggests, does not require a customer to license the Oracle programs separately. Instead, the license cost is baked into the hourly rates for the OCI services. For example, when starting a DBCS VM with DBEE, selecting the “License Included” option will eliminate the separate license requirement in lieu of a higher hourly rate for the DBCS service. This is also available with various OCI Compute services. For example, from the OCI marketplace, you can select and launch OCI Compute images with WebLogic suite installed with License Included. In this case, you will not need to separately license WebLogic or any pre-requisites – it’s all included. The other upside is that ongoing license monitoring and tracking is not needed. On the flip side, the ongoing hourly costs will be higher, and you will not have the flexibility to move the workloads to either on-premise or to other cloud vendors. Conversely, if your workload declines, your costs decline and you are not stuck paying annual support on something you are not using.

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.