Oracle recently announced ‘Oracle Support Rewards’ which in essence is a rebate against your support renewals of your licensed Oracle Technology Products (the most popular being Oracle database and Weblogic, but many others too) by using one of Oracle’s Cloud offerings.
Is this reward attractive ? Yes, but it is worth understanding the detail to ensure you understand how it really applies and if there are any gotchas that should be considered. We have written this brief article to give you insight beyond Oracle’s excited pitch.
What Is An Oracle Technology Product: Any Oracle product that resides on the latest Oracle Technology Price List (https://www.oracle.com/us/corporate/pricing/technology-price-list-070617.pdf). There may be some exceptions not yet published by Oracle, so use this as a guide, not as a reference.
Does this include subscription products like MySQL, Java & Oracle Linux: No, these do not qualify as eligible products because a subscription is a mixture of license and support, whereas the Oracle Support Reward can only offset the standalone Support component that is normally renewed annually.
What Oracle Cloud Products are eligible ? All Oracle Public Cloud services apart from any product that pays a license to a third party, therefore operating system license fees (Red Hat, Microsoft, etc…) and VMWARE are not eligible.
Oracle Dedicated Cloud Regions and Oracle Cloud @ Customer with the same exception for third party fees. Only the service consumption fees are eligible to accrue rewards, not the fees associated with the Cloud Control Plane of these services.
We haven’t had this confirmed by Oracle, but we believe only new Oracle Cloud orders from 1st June, 2021 will be eligible to accrue rewards.
Another important distinction is that only Universal Credit Orders for the Oracle Public Cloud are eligible, PAYG orders are not eligible.
How Do I Earn Rewards ? Only eligible consumption of the Cloud Service is considered. You have to redeem the eligible reward to a rewards pool that allows the individual reward to remain for a period of 12 months before it expires, you must consume it within that time period.
Details are still to be released by Oracle, but it is our understanding that this process will start formally in November 2021, we are not aware if consumption prior to November 2021 will be available to redeem.
How Do I Use The Reward ? When your support renewal is due, you may consume eligible rewards to offset the pre-Tax amounts of the support renewal up to 100% of the pre-Tax amount, you will always need to pay for the local tax amount. In the case of perpetual license support renewal, $1 of eligible cloud consumption results in $0.25 available to offset against your support renewal. In the case of EULAs, the amount is $0.33.
Note that you can only do this when the support renewal is < 30 days past the due date, otherwise the invoice is not eligible to have rewards applied.
We haven’t seen the process of applying rewards against support renewals yet, our guess would be that it might not be completely straight forward, but when Oracle publishes those instructions we will update this article to include a link to them.
This is a genuine reward for Oracle customers that have licensed Oracle technology products that also wish to use Oracle’s cloud products. Its not a massive offset, but it is a welcome reduction in costs.
Your cloud spend does not reduce, only your support renewal of licensed technology products. Therefore you have to wait for that renewal to be due before you can see the cost reduction.
Secondly, with the cost of Oracle Public Cloud being low and support renewal costs being relatively high, the savings are not that large. Maybe if Oracle had reversed the mechanism and had the reward calculated from support renewals and applied to Universal Cloud Credits, then there would be a stampede to the Oracle Cloud…
We have tried to use realistic numbers of a typical small Oracle customer.
- Annual Support Renewal of Oracle Database Enterprise Edition 4 Processors: $25,000
- Annual Support Renewal of Oracle RAC 4 Processors: $13,000
- Monthly eligible Oracle Public Cloud spend: $3,000
- Oracle Public Cloud Service commenced: 1st December 2021
- Technology renewal due: 31st May, 2022
At the end of each month starting from early January, 2022, the customer redeems $3,000 of eligible cloud consumption to their rewards pool. The last redemption is performed on 2nd June, 2022 for the month of May. This results in 6 months of consumption being redeemed at a total of $18,000.
On the 3rd June, 2022 the customer ‘pays’ their $38,000 support renewal for technology products. The rewards convert to 25% of $18,000 = $4,500. Once applied, the remaining amount to pay for the support renewal is $33,500 plus any local taxes (in the case of Australia where we are from, this would be GST of 10% which is $3,800).
In this simple but realistic example, the new Oracle Support Rewards has provided some benefit to the customer – not a large amount as previously stated, but a welcome reduction that may assist in some customers deciding to use Oracle’s cloud services sighting the rewards as a partial justification for the costs incurred in migrating workloads.
If you would like to read official information from Oracle, please use the below links:
If you would like to discuss and investigate further how this new offer from Oracle may be of benefit to you, please feel free to contact us further for a no-obligation discussion.