Introduction to Oracle Java License Changes & Its Impact:
This document outlines the Oracle Java License changes and explores potential alternatives for businesses.
Background: A Shifting Licensing Landscape
· In January 2023, Oracle significantly altered its Java license metrics and decided to sell annual subscriptions based on ‘Employee for Java SE Universal Subscription’.
· Prior to January 2023, the pricing was based on traditional licensing metrics of Processor & Named User Plus (NUP). This allowed customers to understand the commercial value of Java based on its deployment.
Impact of the Oracle Java license changes on businesses:
The “Employee for Java” license metric is an expansion on the generally accepted meaning of an employee.
Oracle “Employee for Java” implies that
· Even if one employee has installed Oracle’s commercial Java on his/her computer, the company becomes liable to pay for all its employees.
· And, employees here includes those who are on roll and also other outsourcers, contractors and agents who are working for or on behalf of the company.
The change in the pricing structure is causing significant cost increases for many customers. The increase is variously calculated between 4X to 50X of the actual usage.
Key Points of the New Licensing Model:
- Pricing is determined by total employee count, regardless of Java usage or hardware deployment.
- The Java SE Universal Subscription program reflects these changes, with prices varying from $15 per employee per month (up to 999 employees) to $5.25 per employee per month (40,000-49,999 users).
- Oracle’s example highlights a company of 28,000 employees (including full-time, part-time, contractors, etc.) facing an annual cost of $2.268 million, regardless of individual Java usage.
What is the future?
The new licensing structure has prompted a surge in customers seeking alternatives. Customers are moving away from Oracle Java.
Gartner – amongst other IT industry experts, has predicted that over 80% of Java applications will transition to third-party runtimes by 2026, compared to 65% in 2023.
How is Oracle responding?
Oracle is actively attempting to retain customers through multi-year contracts that lock in subscription revenue.
We have seen 5-year contracts and recently there was talk of 10 year contracts.
Oracle is looking to make this business larger than its database business. Analysing their FY24 Q3 results seems to show that Java revenue will grow to around $2 billion annually following the licensing change within the next few quarters.
Recommendations for Businesses:
Look at alternatives:
o Several viable options exist, including Azul Platform Core, Amazon Corretto, Eclipse Temurin, Red Hat or even Oracle OpenJDK. Companies can achieve significant cost savings, improved support, and greater flexibility by migrating to these alternatives.
Avoid Long Term Commitments
Avoid long-term commitments. Short-term contracts with Oracle might be preferable, providing time for a well-planned migration to a cost-effective alternative.
Conclusion:
The recent Oracle Java licensing changes have altered the landscape for businesses. By carefully considering alternative providers and negotiating strategically, companies can navigate this shift and ensure optimal cost management. We have seen customers saving upwards of 70% by migrating to non-Oracle Java.
You might want to read more about our CEO Sheshagiri Anegondi (Sheshu). He is amongst the foremost Oracle License Management Consultants globally.
Read this if you want to know the 12 steps for ULA Certification. Read here
About Rythium Technologies
Rythium Technologies is a leading provider of software license management (LMS) services. We help our clients reduce their software costs, manage their IT assets, and achieve compliance. Our Oracle LMS services include: Oracle ULA services, Java License Advisory, Oracle license audit defense, Oracle contracts management and Software Procurement consulting. We have worked on more than 240 Oracle license management projects in the past 10 years. We provide services in India, Middle East, South Asia and Africa.
