July 2023 Oracle Java License FAQ Change Could Hurt You

Sometimes Oracle makes major Java changes in their contracts and pricing. Other times Oracle uses non-contractual policies, practices, and general statements to completely change the Java licensing landscape. In July 2023, Oracle changed their Java license FAQ in a way that could significantly damage your IT budget around Java.

Previous Java license changes

Let’s take a step back in time to January 2023. That’s when Oracle changed Java licensing from processors and named users over to an enterprise license requiring every employee and contract to pay for Java even if they are not using it. You can learn more about that change in our article.

At the same time, Oracle released a Java license FAQ. In that FAQ they stated: “Customers of the legacy Java SE Subscription products continue to receive all the original benefits and may renew under their existing terms and metrics.” Sounds great, right? If you have the old license metric, you can continue with the old license metric. No forced license migrations.

As with all things Oracle, the appearance of a customer-friendly policy can often be stunted by aggressive sales tactics.

First stealth audits, then subscription hurdles

Many Oracle sales people quickly ignored the “you may renew under their existing terms and metrics” policy. Oracle was demanding customers send Oracle a ton of information to validate whether they were in fact only using the number of licenses they owned. For example, if a customer owned 100 processor licenses of Oracle Java, Oracle salespeople were sending spreadsheets demanding completion and asking for virtualization spreadsheets, etc. Sound familiar? We call this a stealth audit. Of course, well informed Oracle customers, like those who work with Palisade Compliance, pushed back on this demand and renewed their subscriptions without being audited by Oracle.

So what does Oracle do to try to force migrations? Remember that non-contractual Java license FAQ? Oracle changed it in July 2023. It now reads, “Customers of the legacy Java SE Subscription may, to the extent permitted in their existing order, renew their legacy Java Subscription, subject to confirmation that current usage is reflective of license counts in such existing order.” Please read that again because it is significant.

According to this FAQ and Oracle practices, there are now three hurdles a legacy Oracle Java customer must overcome just to renew their subscription with Oracle. These are:

(1) Have contractual language permitting a renewal (this does not exist);

(2) Undergo a quasi-audit so Oracle can “confirm” the license compliance position; and

(3) Get an approval from Oracle. This one isn’t mentioned in the Java license FAQ, but that’s what Oracle salespeople are telling their customers is required.

It’s all about the money

As you can see, Oracle is really pushing customers to move to the new model. Why? Money, money, money. One of our clients currently pays Oracle approximately $40,000 per year for Java. The new model would result in a $3M Oracle Java tax/windfall/penalty/fee. Call it what you want. The worst part is, according to Oracle’s own salespeople, even if you pass the first two hurdles above, Oracle can still decide not to approve your request.

Here are 4 steps you can take

First, never voluntarily submit to a non-contractual Oracle Java renewal audit. If Oracle wants to audit you then let them send you an audit letter.

Second, understand your Oracle Java position before Oracle does. Once you understand your position then you can make decisions on how/when/if to proceed with Oracle. The reality is, if you use a lot of Oracle Java that requires a paid license then you will pay Oracle a lot of money. If you use very little Oracle Java, then you can build a plan to pay Oracle very little or nothing at all. Keep in mind that all Oracle contracts, including Java, are highly negotiable. If you can say to Oracle, “how about I give you nothing?”, then you will see their price drop significantly.

Third, get help from Palisade Compliance. We have the tools and experience required to keep you in compliance with Oracle while paying Oracle the least amount of money. In fact, even if you need an Oracle Java license, you can negotiate the metric and the pricing.

Fourth, look at alternatives to Oracle Java only after you’ve done the first three above. Don’t rush into buying non-Oracle Java, because you may end up with two Java bills – one to Oracle and one to another vendor. If you think adopting Azul, Red Hat, or OpenJDK will protect you from this Oracle licensing, think again. Oracle Java pops up even when companies adopt non-Oracle Java. That is the nature of Java.

Java licensing and cost optimization is an ongoing exercise regardless of vendors.

Contact us for more information or assistance. Or sign up for Paliversity classes for an in-depth review of Oracle’s Java practices, policies, licenses, and contracting.

Picture of Craig Guarente
Craig Guarente
Craig is the President and Founder of Palisade Compliance, which he founded in 2011. Before 2011, Craig worked at Oracle for 16 years where he was the Global Vice President of Contracts, Business Practices, and Migrations. He was also the Global Process Owner for Oracle’s audit teams (LMS), a member of Oracle’s CIO advisory board, and on the Oracle User Group’s contract and licensing advisory board. Craig is now the leading expert on Oracle licensing, is quoted in dozens of publications, and assists with many high-profile Oracle disputes.