This is an edited transcript of a podcast in which Palisade Compliance APAC managing director Anna-Rita Stanley-Best discusses the key issues around Oracle cloud credits. Podcast is from 2018; issues still relevant in 2021.
What exactly are Oracle’s universal cloud credits?
It’s really a new offering from Oracle, being one contract that is flexible, and allows you to spend money as you use it – or that is the intent of the contract. It covers platform as a service, infrastructure as a service, for certain of their eligible products that they’ve got under those offerings. You can have it in different methods or models, either as a flexible pay-as-you-go model, or as a monthly universal credit structure. The whole idea is that it is easy to contract, and it’s easy to manage.
Are they a really simple way for Oracle customers to consume cloud services as they need them?
You would think so, but there are some more complicated matters to consider for these contracts.
The first question I would ask from you as a client is, do you actually need the service, and does it fit your requirements rather than the vendor’s requirements? So, are they fit for purpose? Do you really know what you’re going to spend in advance? So, can you determine what your spend is going to be in the next 12, 24 or 36 months?
Both of the models under the universal credits require you to determine in advance what you’re going to spend. So, although for the pay-as-you-go model you pay in arrears for what you’ve actually used, for both of those you sign up to a 12-month contract, and you need to have an understanding so those spends don’t run out from underneath you.
What you also want to understand is a lot of these services come under a multitude of different metrics. You need to understand which of these metrics is going to apply, and which of these programmes will apply as part of any one of these service offerings. So, very complicated, rather than simple.
It does sound confusing, complex, and possibly risky?
Absolutely, and probably the most important thing to look out for is that the contract in itself looks simple, but so little is actually contained in that order document. The multitude of terms and conditions and urls it refers to outside of the contract makes it difficult to understand fully, or to know what you’re actually really signing up to.
It’s very important to see that things like protection of data and intellectual property are all covered under your agreement, and that it’s accurately negotiated.
There are prerequisite programmes required for particular services, so you want to make sure you understand what those are, and that it’s clear.
Also you need to understand when this offering starts. When do you sign up for it? A lot of people think it’s when you start using it, but Oracle has got very specific wording in the contracts as to when that time starts. Especially where you pay or you determine a fixed amount of money that you’re going to spend per month on this, you want to make sure that time doesn’t start running out.
Something that most customers aren’t aware of is when you pay a certain fee, whether you use it or not, it’s not refundable. So if you determined a certain monthly fee for 12 months that you’re going to pay, and you don’t use it, you lose it. On the reverse, if you use more than that, you pay for it.
Most probably the real thing to watch out for is who controls this? Who’s got visibility to it, how is it monitored, who manages it, and what input do you have in either defending it or understanding it, or refuting it if it’s not accurate.