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OCI Support Rewards Program versus OCI Discount Schedule, What Makes More Sense For You?

OCI Support Rewards Program versus OCI Discount Schedule, What Makes More Sense For You?In July 2021, Oracle announced the OCI Support Rewards program, which provides credits against a client’s usage of OCI services.  Credits of between 25 and 33 cents can be earned for every dollar spent on OCI PaaS and IaaS services, and can then be used against a client’s On Premise Tech license renewals.

While the program was introduced in July, it officially went live in November.  As part of the breakdown of the program in our previous Blog on the topic, we mentioned this program is focused on new OCI customers and new renewals, so if your company is in a position where you are either signing a new OCI agreement, or renewing your current OCI agreement, this program is intended for you.

As is often the case with new programs from Oracle, information on the possible impact of the new program and how it would coalesce with previous agreements and offers was initially unclear.  Now that it has been a couple of months, the picture has come into focus.

Usage Discount or OCI Credits? Why not both?

The OCI credits program, while intended to supplement previous usage discounts, does have some underlying caveats that should be carefully considered by a client.

If your current OCI agreement utilizes a standard discount schedule, then this program is an additional cherry on top if you will.  However, if you had negotiated a greater than standard discount on your current OCI agreement and were hoping to simply add the OCI Credit Rewards on top of that, this is where things are not so straightforward.  Let’s see how this plays out in a couple of examples:

Example 1:

Let’s take an example of a client who is looking to renew their OCI agreement.  They previously had negotiated a 50% usage Discount Schedule on their services and currently spend 2 Million Dollars annually.  In this example, their true usage is 4 Million, but thanks to the negotiated discount, they spend half that.  In addition to this, their On Premise Technology spend is 1 Million Dollars.

Environment Usage Discount OCI Support Credits Annual Cost
OCI $4M 50% N/A $2M
On-Premise Tech $1M N/A N/A $1M
$3M Total Spend

 

Now, if this client wants to enroll in Oracle’s OCI Support Rewards program, they will have to relinquish that 50% negotiated usage discount in order to qualify.  They instead will be given Oracle’s standard discount schedule, which for a 4 million dollar annual spend, would be in the range of 15%.  With this revised mix, the client will now pay approximately 3.4 Million in OCI costs, and will receive 850,000 in credits for use against their On Premise Technology renewals.

Environment Usage Discount OCI Support Credits Annual Cost
OCI $4M 15% 25% $3.4M
On-Premise Tech $1M N/A $850,000 $150,000
$3.55M Total Spend

 

The overall savings would be lower than what it was under the previous agreement (3 Million total spend with negotiated discount versus 3.55 Million total spend with OCI Support Rewards), and is now split out between Cloud and On Premise Tech.

Example 2:

Looking at this example, we have another client who is coming up on their renewal for OCI services.  The original deal was negotiated based on Oracle’s standard discount schedule as a result of the size of the anticipated usage levels, and a less savvy negotiating team.  In this example, they currently spend $500K on OCI services under a standard 10% Discount schedule and have $500k in annual support for their On Premise Technology licenses.

Environment Usage Discount OCI Support Credits Annual Cost
OCI $550K 10% N/A $500K
On-Premise Tech $500K N/A N/A $500K
$1M Total Spend

 

With their current agreement expiring, the client can now negotiate to be included in the OCI Support Rewards program, resulting in an additional 25% credit or $125,000 that can be used against their On Premise Tech Support Renewals.  Their OCI Discount Schedule is unaffected as it is currently at standard levels.

Environment Usage Discount OCI Support Credits Annual Cost
OCI $550K 10% 25% $500K
On-Premise Tech $500K N/A $125,000 $375K
$875K Total Spend

 

As one can see, the benefits of the OCI Rewards Program are not universal, but given the right scenario, can provide for significant savings.  If you have an upcoming renewal, or OCI is on your roadmap, consideration of this program as well as traditional Discount Schedules should be kept top of mind.

 

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