On January 23rd 2023, Oracle made significant changes to how they license Java. Like all well-run businesses, Oracle is constantly looking to increase their revenue. These Java license changes are clearly designed to do just that. Not only is Oracle trying to increase monies coming in, they are also trying to lock out their competition.
Note: these changes do not impact Oracle partners who embed Oracle Java in solutions they sell to their customers.
We’ve read through the announcement, talked with our clients, and witnessed how Oracle sales are already approaching their customers to push the new model. Now it’s time to summarize what we’ve learned and outline what you should do in this new Java world. In this article we will outline:
- What Oracle announced
- What Oracle is not saying
- What is Oracle actually doing?
- 6 steps to protect yourself NOW and get the most from Java
What are the Java license changes?
There are three main points in Oracle’s announcement:
First, Oracle no longer offers subscription Java on a Processor or Named User Plus model.
Second, going forward, the only model available is an employee-based license. If you want to license Java from Oracle you have to license all of your full time, part time, temporary employees, and contractors. This is the policy regardless of whether they are actually using the software.
Finally, Oracle announced that existing Java subscription clients can renew their Java contracts under the same “terms” and “metrics.”
What does all this mean?
Under the previous licensing model, customers were in a constant battle with Oracle over Java implementations in VMware environments. How to count and measure was in question and it lead to significant delays in Oracle’s Java deals.
The new model replaces that problem with the new problem of having to license Java for people who never use it.
Also, given our analysis of over a dozen active Java contracts, Palisade Compliance sees Oracle fees increasing anywhere from 2x to 10x! The good news here is that there is a way to avoid this cost increase. We’ve highlighted it below.
What is Oracle not saying?
As stated above Oracle also announced that existing Java subscribers can renew under the same “terms” and “metrics”. While this may offer some assurances, we urge a cautious approach and not to rely on the belief you will get the same deal next year and beyond.
When Oracle makes big changes like this one they typically offer some grandfathering, but with caveats. What Oracle is not saying is whether the pricing will be the same, and if so, for how long.
Let’s say you have 100 processor licenses on an annual subscription, and you are paying $100,000 per year. Will you pay the same next year? Will Oracle increase the price? What about the year after? What if you need 10 more processors because your company is growing? Will you be allowed to buy more? What will the cost be?
Years ago, Oracle licensed their db software by “concurrent device”. They eliminated that metric but did not force customers to give them up. However, Oracle refused to sell additional concurrent licenses when customer needs increased. This effectively forced many Oracle customers to give up their old licenses in favor of the newer models. (FYI, Palisade Compliance clients have never given up their old concurrent licenses!)
As you can see there is a lot that Oracle is not announcing now. We believe Oracle is offering this grandfathering to quell any anxiety their existing client base may have with the new licensing model. However, Oracle will most certainly restrict, limit, and push their existing clients to the new model. You must be prepared for this Oracle tactic.
What is Oracle actually doing today?
Literally on the day of Oracle’s announcement, their sales teams changed their sales tactics and began a hard push to clients and prospective clients. From all appearances the reps knew the change was coming and were well prepared with a strategy on how to apply pressure.
Oracle reps are no longer looking to find out how big a customer’s environment is, or whether that customer is using VMware. Now these same salespeople are simply stating how many times customers have downloaded Java from Oracle’s website and how many employees the customers have based on public information. I’ll paraphrase, but the communications are going to be something like this:
Dear Customer,
We need to address your Oracle Java license shortfall. Oracle recently announced changes to our Java licensing model designed to make it easier for you. You’ve downloaded Java 83 times and you have 10,000 employees. Based on this information we can now price out your Java licensing requirements. Please let me know when you can talk this week so we can come to an agreeable solution.
It is very important that you know how to respond to Oracle and what you should be doing to protect your firm.
Six steps to take right now
1. You should do is read Oracle’s FAQ and price list. There is more detail than what we’ve highlighted here.
2. You should also be aware that Oracle not only watches what you download off of their website, but they also know what Java you’ve installed and what is running. Unlike database, Oracle Java can phone home and send information around your usage back to the mothership. Ensure you IT teams have this information. We’ve had some clients restrict who can access oracle.com. Others have set a corporate standard on how Java is implemented to eliminate data being sent back to Oracle.
3. Keep track of what Java products are installed and running in your enterprise. This includes Oracle and other Java vendors like Azul, Red Hat, and Amazon’s Corretto to name a few. Palisade Compliance has tools you can use to find and analyze this usage. You can use the Palisade Portal on your own or with our assistance. One example of the Palisade Portal report is below:
4. Even if you move off Oracle completely it will be important to do regular updates to ensure that Oracle’s paid Java software does not re-enter your environment. It’s very easy for the software to be downloaded and installed. You need to stay on top of this. Customers can subscribe to the Palisade Portal to get this information on a regular basis.
5. If you do require a new paid license from Oracle, it is still important that you know what you are using, even though Oracle wants you to license every employee. The reality of Oracle’s pricing methodology is that they discount their software from 0% to 100%. If you use very little Oracle Java then you can negotiate a higher discount off Oracle’s price list. If Oracle attempts to refuse a negotiation on price, then you can determine the costs of migrating off. The value of Oracle’s software is not what’s listed on their price list. The value is determined by what you are doing with it and/or what it would cost you to stop using it. If you can calculate that value, then you will make an objective and informed decision on whether or not to pay Oracle or change horses. Palisade Compliance can assist will all your Oracle negotiation needs.
6. Existing Java Processor and Named User Plus subscribers should start asking their Java reps for those renewal quotes right away. Have that discussion as early as possible so you can see exactly what Oracle will propose going forward. As we wrote above, there is plenty Oracle did not announce. Your renewal is when Oracle will be forced to show their cards. Again, when you have that quote, and you have information on how you are currently using their product, then you can make an objective decision on what to do next.
A significant Oracle change
As you can see, these Oracle Java license changes are significant and will have an impact on the usage of their product and fees you pay to them. Either you can take control of this situation and manage your opportunity and risk, or Oracle will do it for you. Understanding your usage, looking at alternatives, and planning your negotiation strategy are all components to achieving your corporate goals in a cost-effective manner.
Wherever you are in your usage of Java, whether you use Oracle, Azul, Red Hat, Corretto, OpenJDK, or any others, Palisade Compliance can help you understand that usage and support you in making objective decisions that are best for your organization.
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