Oracle Cloud Free Tier vs a $5 VPS: When "Free" Stops Being Free
If you have spent any time looking for a cheap server, someone has told you to just use Oracle's free tier. It is a fair suggestion. Oracle gives away more than any other big cloud, and for some people it is the right answer.
I run a small VPS company, so you can guess which way I lean. I'll be straight with you anyway: below is what Oracle's Always Free tier actually includes, taken from Oracle's own documentation, the limits people tend to run into, and when paying $5 a month makes more sense than paying nothing.
Oracle changes these limits from time to time. Everything here is from their docs as of October 2026, and every number links to the page it came from, so check those before you decide.
⚡ Get Started from $5/mo, use code LAUNCH2026 for 50% offWhat Oracle's Always Free tier includes
Here is the compute and storage you get, in Oracle's words:
| Resource | What Oracle says you get |
|---|---|
| Arm compute (Ampere A1) | "the first 1,500 OCPU hours and 9,000 GB hours per month for free", which Oracle says is "equivalent to 2 OCPUs and 12 GB of memory" (source) |
| Number of Arm servers | "you can create one or two OCI Ampere A1 Compute instances, 2 OCPUs total" (source) |
| x86 compute (AMD Micro) | "up to two" instances, each with "1/8th of an OCPU" and "1 GB" of memory (source) |
| Micro network speed | "up to 50 Mbps network bandwidth via the internet" (source) |
| Disk | "a total of 200 GB of Block Volume storage", and "The minimum boot volume size for each instance is 47 GB" (source) |
| Outbound traffic | "10 TB per month of outbound data" (source) |
One thing to watch: a lot of older guides still say the free Arm allowance is 4 cores and 24 GB. Oracle's page now says 1,500 OCPU hours and 9,000 GB hours, or about 2 OCPUs and 12 GB. If a tutorial promises you more than that, it is out of date.
On paper, that Arm allowance beats a $5 VPS, ours included. Two Arm cores and 12 GB of memory is a lot of server for free. So why would anyone pay?
Where people run into walls
1. Quiet servers can be reclaimed
This is the big one. Oracle's documentation says: "Idle Always Free compute instances may be reclaimed by Oracle." It counts an instance as idle if, over a 7-day period, "CPU utilization for the 95th percentile is less than 20%", "Network utilization is less than 20%", and, for the Arm shapes, "Memory utilization is less than 20%" (source).
Think about what most personal servers actually do. A Discord bot, a small website, a password manager, a VPN you use when you travel. They sit there doing very little most of the week, and that is the whole point of them. Those are exactly the servers that look idle.
2. Capacity is not guaranteed
When the free shapes run out in your region, Oracle's docs tell you what you will see: an "out of host capacity" error, which "indicates a temporary lack of Always Free shapes in your home region." Their advice is to "Try creating the instance in a different availability domain, or wait a while, then try to create the instance again" (source).
3. You only get one region, and you pick it once
The free compute only works in your home region: "You must create the Always Free compute instances in your home region" (source). You choose that region at sign-up, and "You can't change this after signing up" (source). If your home region is short on capacity, you can't just move.
4. The generous part is Arm
The 2 OCPUs and 12 GB are on Arm processors. Plenty of software runs fine on Arm now, but not all of it. Before you build on it, check that everything you plan to run has an arm64 build. The x86 option is the AMD Micro, and that is 1/8 of an OCPU with 1 GB of memory.
5. Read the fine print on the trial
New accounts also get a trial: "$300 of cloud credits that are valid for up to 30 days" (source). Your Always Free resources keep running when it ends. But "Paid resources that were provisioned with your credits during your free trial are reclaimed by Oracle unless you upgrade your account." And if you went over the free Arm limit during the trial, "all existing OCI Ampere A1 Compute instances are disabled and then deleted after 30 days, unless you upgrade to a paid account" (source). It is easy to build something during the trial that the free tier can't keep.
You also need a card to sign up. Oracle says "your credit card won't be charged unless you elect to upgrade your cloud account", though "You might see a small, temporary charge on your payment method" as a verification hold (source).
What $5 a month gets you here
Our smallest plan is Nebula 1:
- $5 a month, flat
- 1 vCPU, 1 GB RAM, 20 GB storage
- 500 GB of outbound transfer a month
- Its own dedicated IP and full root access over SSH
- x86, so anything built for a normal Linux server runs
- 169 apps you can install from the control panel, from WordPress to WireGuard to Vaultwarden
And the thing that matters most next to the list above: we don't shut a server down for being quiet. A VPS here keeps running as long as it is paid for and used within our acceptable use policy.
Being honest about where Oracle wins: its free Arm allowance is bigger than our $5 plan, and 10 TB of outbound traffic is far more than our 500 GB. If you need more transfer here, extra is $0.01 per GB, or there are add-ons from $5 for 500 GB.
If you need more than Nebula 1, the next step up is Nebula 2: 2 vCPU, 2 GB RAM and 40 GB of storage for $10.
So which should you pick?
Use Oracle's free tier if:
- you are learning, testing, or running something you could rebuild in an afternoon,
- everything you run has an Arm build,
- your server will stay busy, or you are fine with it being reclaimed if it sits quiet,
- you can live with "out of host capacity" until a slot frees up.
Pay for a small VPS if:
- you want it to stay up even when it sits quiet, without worrying about it being reclaimed,
- it sits quiet most of the week, like a bot, a VPN or a password manager,
- you need x86,
- you would rather pay a small fixed amount than wonder about it.
Whichever you choose, keep backups somewhere else. No single server, free or paid, should hold the only copy of anything you care about. Our guide on how to back up a VPS walks through it.
If you decide $5 is worth it, Nebula 1 is here. If you go with Oracle, I hope it treats you well.
Related reading: How much does a VPS cost? and What is bandwidth and why does it matter?
A $5 VPS that isn't reclaimed for being quiet
Nebula 1: 1 vCPU, 1 GB RAM, 20 GB storage, 500 GB transfer, a dedicated IP and full root access. Use code LAUNCH2026 for 50% off your first month on monthly billing.
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