Oracle HCM Cloud Licensing and Pricing

Understanding the Oracle HCM Cloud licensing and pricing can be challenging. This article aims to provide some guidance and clarification. The Oracle Fusion Human Capital Management Base Cloud Service is a package of services that are included when a customer purchases the base Oracle Fusion Human Capital Management Base Cloud Service. This base cloud service is a necessary starting point for using Oracle HCM Cloud. The Base Cloud Service includes various features and services. Use our guide to ensure that you accurately determine the pricing and licensing for your Oracle HCM Cloud implementation.

Oracle Fusion Human Capital Management Base Cloud Service

The following Oracle HCM Products are included in the Fusion Human Capital Management base cloud service:

• Oracle Fusion Global Human Resources
• Oracle Fusion Global Absence Management
• Oracle Fusion Benefits
• Oracle Fusion Cash Management (restricted use)
• Oracle Fusion HCM Journeys
• Oracle Fusion Payroll Interface
• Oracle Fusion Onboarding

And

• Oracle Fusion Workforce Directory Management
• Oracle Fusion Workforce Predictions
• Oracle Fusion Work Life Solutions
• Oracle Fusion Transactional Business Intelligence for Human capital Management Cloud service

Oracle Hosted Employee – HCM License

Below is a copy of the Oracle license definition:

Hosted Employee: is defined as (i) all of your full-time, part-time, temporary employees, and (ii) all of your agents, contractors, and consultants where such agents, contractors, and consultants have access to, use of, or are tracked by, the programs. The quantity of the licenses required is determined by the number of Hosted Employees and not the actual number of users. In addition, if you elect to outsource any business function(s) to another company, the following must be counted for purposes of determining the number of Hosted Employees: all of that other company’s full-time employees, part-time employees, temporary employees, agents, contractors and consultants that (i) are providing the outsourcing services and (ii) have access to, use of, or are tracked by, the programs.

This means that you must obtain a license for the following:

• All of your full-time, part-time, and temporary employees.
• All agents, contractors, consultants, or any other individuals who are tracked by Oracle HCM programs, regardless of whether they actually use the Oracle HCM system or not

You do not need to match the number of Fusion Human Capital Management Cloud Service options to the number of users of the base service, and you do not have to license the entire employee population.

Additional requirements and prerequisites for test environments:

• If you have less than 10,000 hosted employees, you must purchase at least one additional test environment for Oracle Fusion Cloud service.
• If you have 10,000 to 50,000 hosted employees, you must purchase at least three additional test environments for Oracle Fusion Cloud Service.
• If you have 50,000 or more hosted employees, you must purchase at least four additional test environments for Oracle Fusion Cloud service.

Oracle HCM License costs

Cost of Oracle HCM Base cloud:

• The Oracle Fusion Human Capital Management Base Cloud service costs $15 per month.

Minimum purchase and contract terms:

• The minimum purchase is for 1,000 employee users, and the minimum contract term is three years. This means that even if you only need 200 employees, you must purchase a minimum of 1,000.

Oracle HCM Cloud Service Options

Licensing HCM service options:

• Oracle Fusion Human Capital Management Cloud Service Options
• You do not need to have the same number of hosted employees on your service options as you do on the base cloud service.
• Options include:
  • Fusion Advanced Human Capital Management Controls Cloud Service
  • Fusion Dynamic Skills Cloud Service
  • Fusion Human Resources Help Desk Cloud Service
  • Fusion Recruiting Cloud Service
  • Fusion Workforce Compensation Cloud Service
  • Policy Automation for Workers Cloud Service
  • Strategic Workforce Planning Cloud Service
  • Fusion Workforce Health and Safety Incidents Cloud Service
  • Fusion Talent Management Cloud Service
  • Fusion Time and Labor Cloud Service
  • Fusion Learning Cloud Service

How to configure and build your Oracle HCM Cloud Service:

• Use the Oracle HCM Cloud pricing calculator to determine your costs.
• The Fusion Dynamic Skill Cloud service is licensed per hosted Employee, and you must also purchase a license for the HCM Base cloud service as a prerequisite. The license price for Dynamic Skill is $3 per Employee, and you must have a minimum of 1,000 hosted employees.

For example, if you want to implement the Dynamic Skill Cloud service and determine that you need 3,000 hosted employees to meet your usage needs.

To meet your needs, you will need to purchase the following:

• Oracle Fusion HCM Base Cloud Service: 3,000 hosted employees; list price is $540,000 annually.
• Fusion Dynamic Skill Cloud Service: 3,000 hosted employees; list price is $108,000 annually.

Before discounts, the total cost will be $540,000 + $108,000 = $648,000.

Negotiating Oracle HCM Cloud Contracts: 8 Key Points to Consider

Transition and shelving of existing on-premises software licenses:

• When you migrate to Oracle Cloud, you may need to pay for both cloud services and maintenance for your on-premises software licenses during a transition period.
• Oracle may be willing to waive maintenance fees for your on-premises software licenses during this time.
• It is also important to retain your on-premises software licenses in case you ever decide to move away from Oracle Fusion in the future.

Considerations for services delay:

• Oracle may try to get you to commit to starting your cloud services as soon as possible during negotiations.
• However, it is important to ensure that the cloud services match your go-live date and do not begin prematurely.
• If you sign a Fusion contract for multiple years but do not go live with Fusion until year 2, you may waste a significant portion of your cloud contract value.

Renewal cap:

• Oracle typically includes a renewal cap in Fusion contracts, which limits how much they can increase the renewal price when your current contract is up for renewal.
• It is advisable to try to get the renewal cap as low as possible, but note that it is only valid if you maintain the same number of users and services.
• If you reduce the number of cloud users, the renewal cap is no longer applicable.
• Therefore, it is important not to “over-buy” cloud users and, instead, make smaller purchases and add additional users as needed.

Successor cloud products:

• This contract term is intended to prevent the vendor from bundling or discontinuing certain Fusion cloud services during the contract period.
• In the past, Oracle has bundled multiple Fusion cloud services into a more expensive package, resulting in a price increase for companies that only wanted a specific service.
• This contract term helps to prevent this from occurring again in the future.

Rebalancing:

• This term allows Oracle to provide flexibility in the event that you want to use your cloud services for a different cloud service during the contract period.
• For example, if you realize that one of the cloud services you purchased will not be adopted, you may be able to avoid wasting the commitment by using it for a different Oracle cloud service instead.

Price hold:

• If you want to obtain pre-negotiated discount levels for additional purchases, Oracle is often willing to grant this.
• However, there may be minor details to negotiate, such as the length and minimum purchase.

Cloud user definitions:

• It is important to carefully review the definitions of cloud users, such as hosted user and hosted Employee.
• Misunderstanding these definitions can lead to non-compliance with Fusion HCM, ERP, and SCM.
• If you have existing users that may not fall into Oracle’s standard cloud user categories, you should negotiate this with Oracle before moving to Oracle Fusion Cloud

Expansion purchases

• If you make purchases in addition to the initial purchase and you use the price hold. All of those purchases will be considered the same purchase. This means that your renewal cap will only be valid if you renew all of your Oracle HCM cloud purchases.

Frequently asked questions about Oracle HCM Cloud

How much does Oracle HCM cloud cost?

Oracle HCM Cloud has a base cost of $15 per month per employee, with a minimum licensing requirement of 1000 employees. The cost of additional modules and services, such as Oracle Universal Cloud Credits, will vary depending on your specific needs. Please note that the minimum licensing requirement applies regardless of the number of actual users within your company.

Is Oracle HCM cloud only available as a software as a service?

Oracle HCM Cloud is only offered as a software-as-a-service (SaaS) solution, which means that it is accessed and used over the internet. Customers have the option to run the SaaS solution on Oracle Cloud servers on their own premises or in Oracle’s own cloud data centers.

How will i know which Oracle HCM cloud modules I need?

To determine which Oracle HCM Cloud modules you will need, you will need to review the roles and privileges required by your company and match them with the appropriate Oracle HCM Cloud license or service

How do I keep track of my Oracle HCM usage?

To keep track of your Oracle HCM usage, you can review the authorized versus subscribed metrics in the Oracle Cloud dashboard portal.

Can I sign a 2 year Oracle HCM cloud contract?

It is not possible to sign a two-year contract for Oracle HCM Cloud. The minimum contract length is three years, and many customers choose to enter into a five-year contract

How do I make sure my renewal prices dont go up?

To mitigate the risk of price increases when renewing your Oracle HCM Cloud contract, it is recommended that you negotiate a price cap with Oracle. This will help ensure that the prices you pay upon renewal do not increase too significantly

What should I consider before moving to Oracle HCM Cloud?

There are several factors to consider when negotiating an Oracle HCM Cloud contract:

1. If you are an Oracle EBS HCM customer transitioning to Oracle HCM Cloud, review your existing licenses to determine which ones will be relevant for your new cloud service.
2. Carefully map out the licenses that you need to ensure that you are purchasing the appropriate Oracle HCM Cloud services.
3. Be mindful not to over-purchase services that you may not actually need.
4. Keep in mind that implementing an Oracle HCM Cloud solution typically takes 12-18 months

How our Oracle HCM Cloud experts can help

Oracle HCM Cloud Optimization and Negotiation is a service that helps organizations to get the most value out of their Oracle HCM Cloud implementation. This includes reviewing and optimizing current usage, identifying opportunities for cost savings, and negotiating favorable terms with Oracle.

During the optimization process, our team will review your current usage and identify areas where you may be overpaying or underutilizing certain features. We will work with you to understand your business needs and recommend adjustments to your Oracle HCM Cloud configuration to maximize value.

For negotiation, our team will review your current contract and identify any potential areas for improvement. This may include seeking more favorable pricing, transitioning and shelving of existing on-premises software licenses, and negotiating terms such as renewal caps and price holds.

Overall, our goal is to help you get the most value out of your Oracle HCM Cloud investment and ensure that it is aligned with your business needs.