In case you enter into a standard Unlimited License Agreement, you will pay a license fee (CAPEX) and the associated support maintenance fee (OPEX). The ULA 2 Cloud program results in a situation where you get the option to “repurpose” your support maintenance fee. What does this mean?
During a defined period of time (the so called “Repurposed Support Period”) you are allowed to repurpose (or convert) the technical support fee to its equivalent Oracle Cloud Service (e.g. Oracle IaaS or Oracle PaaS Cloud Services). Be aware though this doesn’t apply to all Oracle programs, but only to the support fees paid for the use of on premises Oracle licenses included in your ULA. The programs which you are allowed to convert are called “Eligible Programs” and the order through which you convert parts of your technical support fee into its equivalent Oracle Cloud Service is called an “Eligible Cloud Service Order”.
Repurposing your technical support fee can be done by executing a Eligible Cloud Service Order, but only as long as
- the Cloud Service is obtained for at least one year and the Cloud Service chosen is made available for production use (to avoid that end users are repurposing technical support for Cloud Services that Oracle may make available in the future)
- the repurposed support fee shall not be more than 50% of the total Cloud Services order (in other words, you need to additionally pay 50% of the total cloud fees at all times)
- the amount of repurposed support may cumulatively (i.e. across all Eligible Cloud Service Orders) not exceed the lesser of either:
- a) the net total support fee paid for the Oracle programs which are eligible and part of your ULA, or
- b) the net total license fee paid for the Oracle programs which are eligible and part of your ULA.
- you do not assign the Eligible Cloud Service Order to another legal entity. In this way Oracle avoids that end users use this option to reduce their annual technical support fees by assigning licenses to another legal entity
- you only repurpose your technical support for one Oracle Cloud Service per Oracle Fiscal Year, meaning you are not able to convert your technical support to multiple Oracle Cloud Services.
At the end of the period in which you are entitled to repurpose your technical support paid for your on premises licenses to Oracle Cloud Services (the end of the Repurposed Support Period) you are NO longer entitled to repurpose your annual technical support for Cloud Services. The amount of the repurposed support will become (again) part of your total technical support fees paid for your (on premises) ULA programs.
Let’s look at an example to make this more specific:
An end user enters into a 2-year ULA for a Net License fee of USD 10 M and an associated annual net support maintenance fee of USD 2.2 M. The total costs in the first year would then be USD 10 M Net License fee + USD 2.2 M Net Support fee.
In the second year of the ULA, the end user decides to start using Oracle Cloud by making an investment of 500K USD in Cloud Services as well as to repurpose 500 K USD of the annual support maintenance fee for Cloud Credits. The total costs in the second year would then be USD 2.7 M, consisting of USD 2.2 M for 2nd year support (assuming that no support indexation is applied) + USD 500 K. Apart from the benefits of technical support, the end user would receive a value of USD 1.0 M Cloud Credits, consisting of USD 500 K repurpose of support + USD 500 K new investment).
In case the consumption of the Cloud Credits remains stable, the end user is no longer eligible to repurpose technical support in the 3rd year after signing the 2-year ULA. The total costs in the third year would thus be USD 3.2 M, comprised of USD 2.2. M for 3rd year support (assuming that no support indexation is applied) plus USD 1.0 M USD to cover the total consumption of the Oracle Cloud Services.