Affiliate usage rights in Oracle Fusion Cloud contracts

For organisations using Oracle Fusion Cloud, the Affiliate Usage Rights clause in your agreement is an essential yet often overlooked component. By understanding this clause, organisations can maximise their Oracle investment, avoid unnecessary expenses, and reduce the risks associated with non-compliance.

How does it work?

The Affiliate Usage Rights clause allows subsidiaries, sister companies, or other affiliated entities to use Oracle Fusion Cloud services under a single master agreement. While this clause is meant to streamline operations and facilitate broader cloud adoption across affiliated entities, it comes with specific conditions and limitations.

These include:

• Customer definition: Which legal entities are allowed to make use of the Fusion Cloud subscription. Any legal entity not specified in the agreement is NOT allowed to make use of the Oracle Fusion Cloud subscription.
• Territory: Which specific country, countries or global use rights are granted.

This clause offers several advantages for organisations using Oracle Fusion Cloud.

1. Cost savings
   
   
   • Centralised licensing allows affiliates to make use of Oracle Fusion Cloud services without purchasing separate agreements, reducing overall costs.
   • Volume discounts: Consolidated consumption often qualifies for volume-based pricing discounts.
2. Operational efficiency
   
   
   • Simplified administration by managing subscriptions and usage under one contract instead of multiple agreements.
   • Uniform policies and services across the organisation, leading to streamlined operations.

Considerations and best practices

1. Optimise consumption and cost savings

• Centralise management: Use a single point of contact to monitor affiliate consumption and avoid duplicate subscriptions.
• Evaluate needs regularly: Periodically review the actual consumption of subscriptions across affiliates to identify unused or underused resources.
• Leverage volume-based discounts: Consolidate subscription agreements under a single master contract to qualify for better rates.

2. Avoid costly compliance risks

• Understand the scope of affiliate rights: Ensure affiliates operate within the defined contract terms, including user caps, geographies, and usage types.
• Establish consumption policies: Create internal guidelines for affiliates on Oracle Fusion Cloud consumption, avoiding overages or unauthorised consumption.
• Track consumption consistently: Proactively monitor cloud consumption across affiliates, identifying potential breaches early.

3. Maintain compliance

• Maintain compliance: Reconcile your entitled subscriptions against your authorised consumption on a regular basis to ensure compliance.
• Document everything: Keep detailed records of affiliate structures, consumption levels and internal communications related to Oracle Fusion Cloud services.
• Partner with experts: Work with experienced advisors like SoftwareOne to navigate compliance discussions, interpret contract terms, and respond effectively to questions from Oracle.

4. Negotiate terms during renewals

• Include flexibility: During contract negotiations, seek flexibility to accommodate potential affiliate expansions or changes.
• Ensure clarity: Define affiliate usage clearly to prevent ambiguity during audits.

Conclusion

The Affiliate Usage Rights clause in Oracle Fusion Cloud contracts is essential to enable efficient operations across affiliated entities and to reduce costs. However, it is important to understand that the benefits come with compliance responsibilities at group level instead of local entity level.

Don’t miss the opportunity to take control of your Oracle Fusion Cloud contracts. If you have any further questions, don’t hesitate to reach out to your SoftwareOne representative and schedule a call with one of our Oracle Solution Specialists.