OCI Annual Universal Credit

This is potentially delving too deep into the contracting weeds than most folks of a technical nature would wish. But as I’ve indicated in the previous post, when it comes to cloud, cost is all important, so it is worthwhile knowing some of the complexities of OCI billing and consumption.

An Oracle document that goes into the details is the Oracle PaaS and IaaS Universal Credits Service Descriptions. Not exactly for the faint-hearted, but as well as describing what all the terms related to the OCI service means. From the what you think may be straightforward, OCPU, but which is actually an exceedingly long definition, to the more succinct Port Hour, all the billing metrics for the various OCI services are there.

What is also there is the definitions of how the billing works, including the new Annual Flex (or Annual Universal Credit) which it seems replaces Monthly Flex (unless you get “special” Oracle approval)

Your Cloud Services Account will be charged based on one of the following payment/billing models:

1: Annual Universal Credit,

2: Pay as You Go.

The Annual Universal Credit is defined as follows (this is slightly paraphrased from the doc, to remove redundant wording, though keeping the letter case, highlighting decided by me):

Annual Universal Credit

Oracle allows You the flexibility to commit an amount to Oracle to be applied towards the future usage of eligible Oracle IaaS and PaaS Services.

An Annual Universal Credit amount must be used within its applicable yearly Credit Period during the Services Period and will expire at the end of that yearly Credit Period; any pre-paid unused amounts are non-refundable and are forfeited at that time.

The pre-paid balance of the Total Credit Value will be decremented on a monthly basis reflecting Your actual usage for the prior month at the rates for each activated Service

So, as I see it, you commit to spend a certain amount a year. What you use each month of the year is reduced from that total, and if you have anything left at the end of the year it’s gone.

Next there is the definition of the Monthly option, which used to be the standard Monthly Flex option (and is available at the discretion of Oracle)

Monthly Universal Credit (subject to Oracle approval)

Oracle allows You the flexibility to commit an amount to Oracle to be applied towards the future monthly usage of eligible Oracle IaaS and PaaS Services

You agree that You will consume each month during the Services Period a combined total equal to at least the Credit Quantity amount

The Monthly Universal Credit amount must be used within each month and will expire at the end of that month; any unused amounts are non-refundable and are forfeited at that time.

The Monthly Universal Credit balance shall be decremented on a monthly basis reflecting Your actual usage… If, by the end of any month during the Services Period, You have not consumed Services in an amount equal to the Monthly Universal Credit, Oracle will decrement Your account for the credit shortfall for that month

I think it is quite clear the Annual Universal Credit is far more beneficial and flexible to the customer. You buy a pot of credits for a year, and you can consume that pot at any time during the year. It could be all in the final month, or spread evenly over the entire year.

In the Monthly Universal Credit option, essentially your pot is sliced into 12 equal sized pots to be used each month on a use it or lose it basis.

The big savings come if you are performing a migration and are ramping up, say over an entire year. If your average usage over that year is only 70% of the end state, you can commit to that lower level of spend and what you save in the beginning of the ramp up, you can consume towards the end of the year.

I think the customer is the clear winner with this change.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s