Interviewer: Oracle pushes its cloud, OCI, as the best place to run Oracle software. Is OCI really a good deal for Oracle customers?
Fredrik: OCI can be a good platform for Oracle workloads, performance-wise and integration-wise, but whether it’s a good deal depends. Oracle’s sales pitch is that running on OCI avoids some licensing headaches you might have on other clouds and that they’ll give you discounts or credits. If you’re heavily invested in Oracle apps or databases, OCI can offer optimizations like Oracle Autonomous Database, Exadata service, etc. But it’s not automatically cheaper.
Morten: Oracle will claim cost savings, but we often find customers still overspend on OCI because they provision too much or don’t optimize usage. Oracle’s cloud pricing can be complex too, and while they might offer incentives like support rewards (using OCI credits to offset support fees), you have to carefully calculate if it actually saves money. So yes, OCI is tuned for Oracle software, but it doesn’t guarantee a lower bill unless you manage it well.
Interviewer: Are Oracle cloud contracts negotiable? What should customers focus on when negotiating OCI deals?
Fredrik: Absolutely, you can negotiate OCI contracts. Oracle is hungry for cloud business, so they often provide significant discounts if you commit to a certain spend level or term. When negotiating, focus on getting a discount on the list prices or getting extra credits. For example, commit to a yearly spend and get a better rate.
Morten: Also negotiate flexibility. If you commit to, say, $1 million of cloud usage over a year, ensure you can use it across any OCI services, not just a subset. And try to include an out clause or ability to adjust down if your usage is lower than expected – that’s hard, but worth asking. If you’re coming from a licensing dispute or a ULA, leverage that – Oracle might throw in cloud credits or a better rate to close the deal.
Interviewer: What mistakes do companies make when moving to OCI?
Fredrik: One big mistake is assuming moving to OCI will automatically solve their license compliance issues. We’ve seen clients lift-and-shift to OCI thinking Oracle won’t audit them anymore for past issues – not true, past compliance issues don’t vanish. Another mistake is over-provisioning resources. Sometimes they replicate their on-prem setup in OCI without right-sizing, and end up paying for unused capacity.
Morten: Also, not understanding the OCI cost model. Maybe they leave services running 24/7 that they could shut down off-hours, or they use high-performance tiers when standard would do. We’ve seen people rack up unnecessary OCI charges because they’re not monitoring usage. And some assume Oracle will proactively warn them if they’re overspending – they won’t. It’s on you to manage.
Interviewer: Why do some customers overspend on OCI?
Fredrik: It often comes down to overcommitment and lack of governance. Oracle sales might have convinced them to sign up for a certain amount of Universal Credits that turned out to be too much. If you commit to more than you need, you’ll be burning money that you can’t get back.
Morten: Additionally, the ease of spinning up resources in the cloud can lead to sprawl. Teams might start instances, forget to shut them down, and the meter keeps running. Without proper cost monitoring tools and policies, it’s easy to blow past budgets. And unlike on-prem, where you might be capped by your hardware, in cloud you can keep consuming – and paying – until someone notices the bill.
Interviewer: Does Oracle provide any help to avoid overspending on OCI?
Fredrik: Oracle provides some basic tools like budgets, alerts, and cost tracking in the OCI console. They also have account managers who might highlight if you are underutilizing your credits. But let’s be real, Oracle’s goal is not to help you spend less – they want you to renew with even more cloud usage.
Morten: They do have the Oracle Cloud Advisor that gives recommendations to optimize resources. It might say “you have an idle compute instance” or “you could use a cheaper storage tier.” Those are useful if you pay attention. But it’s not deeply hand-holding you. The onus is still on the customer to use those tools and keep costs in check.
Interviewer: Oracle also introduced a Support Rewards program that lets cloud spending offset on-prem support costs. Is that a significant benefit for customers?
Fredrik: Support Rewards can help a bit. The idea is for every dollar you spend on OCI, Oracle gives you a credit – roughly 25 cents – towards your on-prem support fees. If you’re under an Unlimited License Agreement, they bump it to about 33 cents per dollar. So, use Oracle’s cloud and get a rebate on your support bill.
Morten: It’s a nice-to-have, but it shouldn’t drive your strategy. It basically gives a discount on support if you invest in OCI. For companies already paying huge support fees, it’s an incentive to shift workloads to OCI to reduce those fees. But you have to spend a lot on OCI to make a dent in support costs. We tell clients: consider it a bonus if OCI makes sense for you, but don’t move to OCI just for the reward program.
Interviewer: Any tips for avoiding overspending in OCI?
Fredrik: Treat cloud like you would any significant expense – actively manage it. Set up budgets and alerts so you know if you’re approaching limits. Continuously right-size: if a VM is way underutilized, downgrade it. Delete resources that aren’t being used.
Morten: Also, start small and scale up as needed rather than overcommitting. If Oracle offers you a great deal to commit a huge amount, be wary unless you’re sure you’ll use it. It might be better to start with a smaller commitment even if the unit price is a bit higher, to avoid wasting unused credits. And train your technical teams on cost awareness. They should architect solutions on OCI with cost in mind – e.g., use auto-scaling, turn off dev/test environments when not in use, etc.
Interviewer: Oracle’s Exadata Cloud at Customer is a part of OCI offerings but on-premises. What is unique about Exadata Cloud at Customer?
Fredrik: Exadata Cloud at Customer (often abbreviated Exa C@C) is Oracle’s way of bringing their cloud technology into your data center. Oracle ships you an Exadata machine, but you consume it as a cloud service – meaning Oracle still manages some of it, and you pay a subscription or consumption fee rather than owning the hardware outright.
Morten: It’s unique because it blends on-prem and cloud. You get the low-latency, local data residency of having the machine in your own data center, but the billing and scaling model of cloud. Oracle monitors and maintains the infrastructure remotely. It’s basically OCI in your own site for database workloads, particularly if you have stringent data requirements or need the performance of Exadata hardware.
Interviewer: Why would a company choose Exadata Cloud at Customer instead of just using the public cloud or staying on normal Exadata on-prem?
Fredrik: Some companies have regulations or internal policies that require data to stay on-premises, or they can’t move to a public cloud due to latency issues with their applications. Exadata Cloud at Customer gives them a cloud consumption model without letting the data leave their premises.
Morten: Also, if a company has invested heavily in Oracle and wants to use cloud features like Autonomous Database or simply the flexible payment model, but isn’t ready to move to Oracle’s data centers, this is a middle ground. It’s often pitched to large enterprises or governments who want cloud but can’t use public cloud for sensitive data.
Interviewer: What challenges do customers face with Exadata Cloud at Customer?
Fredrik: One challenge is cost – you usually have to sign a pretty hefty contract, often a multi-year commitment. The minimum term is usually several years, and an Exadata isn’t cheap in the cloud model either. You might have to commit to a certain number of OCPUs (CPU units) usage per month and if you don’t use them, you still pay.
Morten: Technically, integration can be a challenge too. It’s on-prem but it’s tied to Oracle’s cloud management. You need a good network and setup for Oracle to remotely manage it. Also, upgrades and maintenance schedules might be controlled by Oracle; you can’t treat it exactly like your own box. Some DBAs find they have less control than a traditional on-prem Exadata. So it requires adjusting operations to align with Oracle’s cloud processes.
Interviewer: Is Exadata Cloud at Customer cost-effective, or is it just another way to lock customers in?
Fredrik: It can be cost-effective if you truly utilize the machine fully and you value the cloud model. Oracle tends to bundle it with a larger cloud agreement or ULA. They might justify it by saying “it would cost you X to buy an Exadata and licenses, but with subscription you pay X over time.” However, you almost always end up paying a premium for the flexibility and the Oracle management.
Morten: It definitely increases lock-in. Once you have an Exadata Cloud at Customer running your critical workloads, you’re deeply tied to Oracle’s ecosystem. Migrating off of that to something else would be a significant effort. Oracle knows this, and it’s part of the strategy – get their hardware and cloud services embedded in your data center so switching out becomes even harder.
Interviewer: Can customers negotiate Exadata Cloud at Customer deals? What should they watch out for?
Fredrik: Yes, you should negotiate. Focus on the minimum commitment – try to get it as low as possible or get credits you can use for other cloud services. For example, if you’re not using the Exadata to its max, can the extra capacity count toward other Oracle cloud usage?
Morten: Definitely clarify the terms for scaling. If you need more capacity, how is it priced? If you need less, are you stuck paying for the higher amount? Also look at who owns the equipment and what happens at end of term – typically Oracle takes it back, but make sure there are no surprises. And ensure you have a plan for data extraction if you ever end the service. Since it’s your data center, you won’t lose data connectivity like in a cloud, but once Oracle carts away the Exadata, you need your databases moved somewhere.
Interviewer: If a company has existing on-prem Oracle licenses, can they use those in OCI or Exadata Cloud at Customer?
Fredrik: Oracle has a Bring Your Own License (BYOL) program for OCI, yes. That means if you already have Oracle Database licenses with active support, you can apply them to Oracle’s cloud services and pay a lower rate for the cloud service (essentially paying for just the hardware and management portion). For Exadata Cloud at Customer, I believe Oracle also allows a form of BYOL or at least had models where you either include licenses or bring yours.
Morten: It’s important to note: your licenses have to be eligible (certain editions, with support paid up). If you BYOL to OCI, Oracle has conversion rates, like one processor license covers a certain number of OCPUs in OCI. That can save money because you’re not repurchasing licenses, just paying for the cloud infrastructure. Many customers use BYOL as a stepping stone – they migrate to OCI using their existing licenses. Oracle wins by getting your cloud consumption, and you leverage what you already bought.
Interviewer: Does Oracle give better deals if a customer commits to both OCI and some other Oracle agreements like a ULA?
Fredrik: Yes, Oracle often tries to bundle. They might say, “Sign this ULA and also commit to $X in OCI and we’ll give you a bigger discount on both.” Oracle’s trying to boost cloud numbers, so tying cloud commitments into license deals is common.
Morten: We’ve seen negotiation packages where Oracle essentially cross-subsidizes. For instance, they may discount a ULA if you also agree to spend on OCI, or vice versa. From a customer perspective, if you do need both, you absolutely should negotiate them together to get maximum leverage. Just be cautious – ensure the cloud portion is something you will actually use. Don’t agree to a large cloud spend just for a discount on licenses if you have no real plan or need for that cloud usage.
Interviewer: Oracle has also tightened the rules for using Oracle licenses on non-Oracle cloud platforms, hasn’t it?
Fredrik: Yes, they have. Oracle used to allow more flexibility for running your licenses on third-party clouds, but now they impose strict limitations. For example, they updated their cloud policy so if you move Oracle software to another cloud provider, you might have to license more cores than you would on OCI. It’s clear Oracle wants to nudge customers towards OCI by making other clouds less attractive from a licensing perspective.
Morten: We advise clients to be very careful when deploying Oracle on any non-Oracle cloud. Always check the latest policy document. Oracle’s rules for AWS, Azure, and others have changed – typically not in the customer’s favor. It might involve higher core factors or no concept of soft partitioning in those environments. It’s a deliberate strategy by Oracle: they can’t forbid you outright, but they can make it costly enough that OCI looks comparatively better.
