SoftwareOne logo

4 min to read

Oracle Flexible Use Clause explained

Patrick Nyindo
Patrick NyindoSenior Solution Sales Specialist, Software & Cloud
oracle-fusion-cloud-contract-optimisation-adobe-581743939-blog-hero

In Oracle Fusion Cloud agreements, maintaining operational flexibility while controlling costs is crucial for businesses. The Flexible Use Clause provides exactly this advantage, allowing organisations to reduce the quantity and usage of their cloud services by a specified percentage while receiving a pro-rata reduction in fees.

Example clause

A typical Flexible Use Clause might read:

"Upon not less than 60 days written notice to Oracle expiring on [DATE], You may, on one (1) occasion, reduce the quantity and usage of the Renewed Cloud Services by not more than thirty percent (30%) as compared to the annual fees for the Renewed Cloud Services."

Key benefits for your organisation

Usage reduction flexibility

  • Decrease consumption of Oracle Cloud services based on changing business needs
  • Adjust cloud resources dynamically without overcommitting to long-term capacity
  • Make strategic reductions when necessary (typically up to 30% as seen in our example)
 

Pro-rata fee reduction

  • When cloud service consumption is reduced, subscription fees adjust proportionally
  • Prevents organisations from paying for unused services
  • Creates direct cost savings aligned with actual usage patterns
 

Optimised cost management

  • Enables better budgeting and financial planning
  • Aligns cloud service costs with actual consumption
  • Provides predictability within changing business conditions
 

Strategic operational agility

  • Safeguards against overcommitting to cloud resources during uncertain times
  • Creates room for adapting to changing business priorities

Best practices for setting up your Flexible Use Clause

  1. Negotiate during initial contract discussions
    • Ensure the Flexible Use Clause is explicitly included in your Oracle Fusion Cloud Agreement.
    • Evaluate the percentage of reduction allowed and request the highest possible limit.
    • Align the clause with your organisation's cloud strategy and consumption patterns.
     
  2. Define clear reduction terms
    • Specify how often reductions can be made.
    • Clarify if reductions apply to all services or only specific Oracle Fusion Cloud subscriptions.
    • Request automatic pro-rata fee adjustments to avoid renegotiation requirements.
     
  3. Benchmark against industry standards
    • Compare Oracle's offering with other organisations to ensure you secure the best terms.
    • Understand what flexibility options are standard in the industry.
    • Use this knowledge to strengthen your negotiating position.
    • Ask SoftwareOne — we have the experts and the experience to help you get the best deal.

How to make the most of it

  1. Monitor cloud consumption regularly
    • Use management tools to track actual service usage.
    • Identify underutilised resources that might be candidates for reduction.
    • Compare consumption trends to contract terms to optimise reduction decisions.
    • Understand the impact of bundling and pricing changes on your organisation.
     
  2. Schedule periodic reviews
    • Conduct quarterly or bi-annual reviews to assess if reductions should be requested.
    • Involve IT, finance, and procurement teams to identify cost-saving opportunities.
    • Create a structured process for evaluating usage patterns and business needs.
     
  3. Submit reduction requests on time
    • Ensure reductions are requested within the permitted timeframe.
    • Follow Oracle's submission process precisely.
    • Plan ahead to accommodate the notice period (typically 60 days as in our example).
     
  4. Maintain documentation and compliance
    • Keep records of Oracle Cloud invoices, consumption reports, and past reduction requests.
    • Ensure ongoing compliance with Oracle's licensing policies.
    • Document decisions and their business rationale for future reference.
     
  5. Collaborate with Oracle Account Management
    • Discuss reduction options proactively with your Oracle Account Manager.
    • Request flexibility in future agreements based on your usage history.
    • Maintain a collaborative approach to managing your cloud services.
     

Summary

The Flexible Use Clause is a valuable component of Oracle Fusion Cloud contracts, offering organisations the agility to adapt their cloud consumption to changing business conditions while controlling costs. By understanding how to negotiate well and then effectively use this clause, you can optimise your cloud investment and maintain financial flexibility.

SoftwareOne can help you leverage this clause effectively, from securing favourable terms during negotiations to implementing practical usage monitoring and optimisation disciplines. Our experts can guide you through each step of the process, ensuring your cloud strategy matches your business objectives.

Don't miss the opportunity to take control of your Oracle Fusion Cloud contracts. If you have any questions, don't hesitate to reach out to your SoftwareOne publisher advisory team for an initial conversation.

It’s free, and it commits you to nothing.

A building is lit up at night.

Contact us today

SoftwareOne has solved many of the Oracle licensing challenges you may face. Tell us about your business challenge, and we’ll get right back to you.

Contact us today

SoftwareOne has solved many of the Oracle licensing challenges you may face. Tell us about your business challenge, and we’ll get right back to you.

Author

Patrick Nyindo

Patrick Nyindo
Senior Solution Sales Specialist, Software & Cloud