Oracle Fusion Cloud Contract Optimisation

Organisations invest significant costs, time, and effort when selecting an ERP solution. Oracle has the right to update its cloud services offering by adding new functionalities to create a new service, or by replacing an existing cloud service—for example, following the acquisition and integration of a new company into Oracle. 

1. Includes similar functionalities and features as the originally ordered cloud service 
2. Is intended to replace another cloud service 
3. Is made available in production to its commercial customers 

This blog outlines the Successor Cloud Services clause, its potential benefits, and how to maximise its value within Oracle Fusion Cloud contracts.  

The clause offers several advantages for organisations using Oracle Fusion Cloud:

1. Continuity of service: This clause ensures that if Oracle introduces a new or upgraded cloud service, organisations can transition to the successor service without significant disruption. This helps maintain business operations smoothly, reducing the risks of the transition.
2. Access to the latest technology: It allows organisations to benefit from the latest advancements and improvements in Oracle's cloud services. This can include enhanced features, better performance, and improved security. 
3. Cost efficiency: Often, transitioning to a successor service can be done without incurring additional costs, or at a reduced cost compared to starting a new contract. This creates a financial benefit for organisations.
4. Simplified contract management: It can simplify contract management by reducing the need for renegotiating terms or signing new contracts when transitioning to new Fusion Cloud services. 

Considerations and best practices

Oracle may grant you the benefits of this clause provided Oracle is no longer supporting or making the original cloud service available to end users (for example, when the service is End of Life, or no longer offering any possible upgrades) and all fees of the initial order are paid in full.

Migration/no fee transition programme

In some cases, Oracle may offer a migration or no-fee transition programme to end-user organisations, allowing them to transition from the originally ordered cloud service to the Successor Cloud Service. Customers should ensure that Successor Cloud Services clause clearly states that they will be eligible for these programmes, provided they meet the necessary requirements as listed above. 

Contractual aspects 

Oracle will require that any service specifications for the new service will be incorporated into your contract. Organisations may need to raise a Service Request or place an add-on order to access the new service. 

Duration 

Typically, Oracle will grant the right to use the Successor Cloud Service until the end of the initial agreement for the originally ordered cloud service. Any consumption beyond this date will require a new order. Because of this, it may be a good idea to include the possibility of a renewal to secure a longer period. 

Cost

Some organisations have included a provision in this clause stating that the new service will be available at the same fee as the originally signed service. In the case of a change in metrics, Oracle will provide the equivalence from the metric of the originally purchased service to the new metric of the new service. Oracle usually specifies that any additional consumption beyond the initial contract will be charged. 

Conclusion

The Successor Cloud Services clause is a crucial component for organisations investing in Oracle Fusion Cloud. It ensures continuity, access to the latest technology, cost efficiency, and simplified contract management. By understanding and leveraging this clause, organisations can maximise their investment and stay ahead in a rapidly evolving technological landscape. 

However, it's also essential to consider the broader implications of this clause.  

As cloud services continue to evolve, organisations must remain vigilant about the terms and conditions of their contracts. Regularly reviewing and updating these agreements can help ensure that they continue to meet your organisation's needs and that you can take full advantage of new advancements. Moreover, the Successor Cloud Services clause highlights the importance of strategic planning and proactive management in cloud service contracts.  

Organisations should not only focus on immediate benefits but also consider mid and long-term goals and potential future scenarios. This forward-thinking approach can help mitigate risks and ensure that organisations remain agile and competitive.