Freedom from product specific license contract with Oracle Universal Cloud Credit

Introduction

Oracle CTO Larry Ellison has recently announced a set of programs designed to make it easier for customers to migrate to the cloud and consume cloud services. It is a new initiative to simplify buying and consuming for PaaS and IaaS Cloud, Oracle has introduced Universal Cloud Credits to its partners.

What It Is?

Oracle has unveiled the concept of “universal credits” for cloud consumption. With one contract, customers can tell Oracle how much they expect to spend (on a pay-as-you-go basis, or on a monthly or yearly basis). The customer is then entitled to use that money on any PAAS and IAAS cloud service. They can switch services or drop certain services without notifying Oracle and can apply their credits to new services when they’re made available.

For instance, if you bought a specific PaaS service for say USD 100,000, you were stuck to that service for a period of 12 months. And you happened to find another service which was actually needed more during that year. In such scenario, what would have been your next step? Probability is that you would have closed the existing contract, signed up for a new deal and lost USD 100,000.

But in case of “Universal credit model”, it is much more flexible. You still invest the same USD 100,000 for a fixed period (for example 12 months) but can use that amount for all Oracle’s IaaS and PaaS services. In terms of user-friendliness, there is a huge improvement. The bigger the investment and the longer the contract term you commit to as an organization, the more advantageous the price agreements are!

Technically What does it imply?

In its infancy, Oracle Cloud was made up from a number of different services that fell into 3 categories:

IaaS – Renting IT resources such as compute and storage

PaaS – Renting IT software to create systems such as application servers and databases

SaaS – Renting Business Applications for running the business such as Financials and Payrolls

Where one could pay for some or all of these services through either a metered – pay as you go – or an unmetered subscription service. It was hard to understand what you were paying for and even harder to budget correctly across multiple services.

The new model provides a single commercial play across the consumption models for all of Oracle’s IaaS and PaaS services

Types of Buy and Use Cloud Payment Models

While organizations are keen to move to the cloud, many have not due to obstacles that have forced them to choose between flexibility and lower costs. They have been challenged by the complexity of the cloud and the inabilities to rebalance spend across different services. Until now, they have been unable to fully leverage their on-premises software investments in the cloud, having been limited to IaaS services or sacrificing key database features at the PaaS layer. Oracle’s new cloud business model address customers’ cloud adoption challenges by improving and simplifying the way they purchase and consume cloud services. The flexible buying and consumption choices for Oracle’s PaaS and IaaS Services are broadly classified into 3:

1. Pay As You Go subscription

When you sign up for an Oracle Cloud Account, you have unlimited access to all eligible IaaS and PaaS services. You can sign up for a Pay As You Go subscription. These services let users add “credits” to their account which get used up based on your consumption. For services where consumption could change quite drastically, you also have metered billing where you are invoiced at the end of a billing cycle based on your consumption.

2. Monthly Flex plan

You can save money and pay in advance for a year, based on your estimated monthly usage, which is the Monthly Flex plan. After you sign up, you can start using any of the IaaS or PaaS services at any time. When new eligible services become available as part of the Universal Credits program, you can automatically access the new services.

3. Bring Your Own License

Currently, customers are able to bring their on-premises licenses to Oracle IaaS. Today, Oracle is expanding the offering by enabling customers to reuse their existing software licenses for Oracle PaaS, including Oracle Database, Oracle Middleware, Oracle Analytics, and others. Customers with existing on-premises licenses can leverage that investment to use Oracle Database Cloud at a fraction of the old PaaS price. Running Oracle Database on Oracle IaaS is faster and offers more features and delivering the industry’s lowest total cost of ownership. Additionally, customers can further reduce management and operational costs required for on-premises maintenance by taking advantage of this PaaS automation.

Universal Cloud Credits Vs. Amazon Web Services

This new program is said to be a part of Oracle’s strategy to cut into Amazon Web Services'(AWS) cloud dominance. Oracle has also planned to offer more automation at lower list prices which is conducive for simplicity in doing businesses. Such offers by Oracle are expected to dramatically ease the complexity of contracting for and consuming cloud services.

Oracle has also assured to match AWS list prices for IaaS with better performance. To attract more of their perspective, Ellison has guaranteed that if a prospect migrates a workload from Amazon to Oracle, their bill will drop by 50 percent.

What its customers get really out of this?

• Customers gain on-demand access to all services plus the benefit of the lower cost of pre-paid services.
• They have the flexibility to upgrade, expand or move services across datacentres based on their requirements.
• With Universal Credits, customers gain the ability to switch the PaaS or IaaS services they are using without having to notify Oracle.
• Customers also benefit from using new services with their existing set of cloud credits when made available.

Nutshell

Oracle’s Universal Credits can only be explained as the industry’s most flexible buying and consumption model for cloud services. With Universal Credits, customers have one simple contract that provides unlimited access to all current and future Oracle PaaS and IaaS services. This latest announcement by Oracle should go a long way towards transparency and building trust in the market.

Clients now need to buy just a single product – Universal Credits. These credits are then used to acquire Oracle’s IaaS and PaaS services (not SaaS yet, unfortunately) across one of the following 3 consumption models. Oracle is also to be praised for its billing controls and alerts. They are far easier to set up from the portal than its competitor equivalents.

Oracle has a simplified pricing model and its pricing compares favorably to its cloud competitors. Overall, a chin up to Oracle with this latest update.