Oracle's revised Java licensing terms 2-5x more expensive for most orgs

One in five users can expect an audit in the next three years

Most organizations adapting to Oracle's new licensing terms for Java expect the per-employee subscription model to be two to five times more expensive than the legacy model, according to Gartner estimates.

Speaking to clients since the new model was introduced in January, the global technology analyst said the steep increase in Oracle licensing costs at the majority of Java users would mean that by 2026, more than 80 percent of Java applications will be deployed on third-party Java runtimes, up from 65 percent in 2023.

Gartner has also warned that Oracle is ready to test whether users comply with Java licensing terms as it sees them. One in five Java users can expect an Oracle audit in the next three years, Gartner said.

In January, Big Red, which acquired Java with its buyout of Sun Microsystems in 2009, said the new Java SE Universal Subscription was "a simple, low-cost monthly subscription that includes Java SE Licensing and Support for use on Desktops, Servers or Cloud deployments."

"Customers of the legacy Java SE Subscription products continue to receive all the original benefits and may renew under their existing terms and metrics," it said.

However, licensing experts have said it is clear that Oracle will strive to move customers onto the new terms. Earlier this month, The Register revealed how Oracle is sending unsolicited emails to businesses offering to discuss Java subscription deals, seemingly to extract information that could benefit future license negotiations.

The new model is based on a per-employee measure of consumption, rather than the per-processor or per user approach previously taken. Oracle has explained the new model and published a new price list [PDF].

Associate principal analyst Nitish Tyagi, co-author of the new Gartner research note, gave The Register a hypothetical organization with 49,500 employees, all of whom are applicable for the "Named User Plus" (NUP) license as per the legacy subscription model. That organization is also running Oracle JDK on 5,000 processors, and as such would pay $742,500 for NUP licenses and $900,000 for processor licenses under the legacy deal. The new Universal Subscription model would cost it about $3,118,500, a 90 percent increase in price.

"For large organizations, we expect the increase to be two to five times, depending on the number of employees an organization has. Please remember, Oracle defines employees as part-time, full-time, temporary, agents, contractors as in whosoever supports internal business operations has to be licensed as per the new Java Universal SE Subscription model," he told us.

Gartner has also estimated that by 2026, one in five organizations using Java applications will be audited by Oracle, leading to "unbudgeted noncompliance fees." By the same year, more than 30 percent of organizations using Java applications won't be compliant with their Oracle contracts.

Pressure from Oracle on license costs will mean more than 80 percent of Java applications will be deployed on third-party Java runtimes by 2026 up from 65 percent in 2023, Gartner said.

"Clients are moving towards third-party Java runtimes such as Azul, Amazon Coretto, Eclipse Temurin and IBM Semuru since Oracle announced the heavy pricing model. Other surveys also indicate decline in Oracle JDK usage and increase in use of other Java runtimes," Tyagi said.

Gartner recommends that organizations find out whether they need to purchase an Oracle Java SE subscription, bearing in mind different iterations of Java have different license requirements. Organizations should also prepare detailed documentation to support the licensing negotiations, working with application and operations leaders. And users should evaluate the available options by assessing the organization's appetite to move Java workloads to Oracle Cloud Infrastructure – which includes Java licenses – or migrate to Java 17 or switch to a third-party Java product.

The Register has asked Oracle for a response to the points raised in this article.

"As soon as Oracle announced it, we started getting many more inquiries on Oracle Java Licensing and during those calls, we could see the frustration on clients' faces," Tyagi said.

"The clients who were already on the legacy subscription model that was based upon desktop and processors were keen on keeping themselves on the same model. Their only doubt was in what situation Oracle can push them to the Universal Subscription model."

But he added that well-prepared users should not worry that Oracle will become more aggressive with audits in the wake of the new Java rules. "We have seen in the past that Oracle doesn't do an audit unless they see a clear ROI on it as audits aren't cheap," he said.

Gartner said Java users have six options with regard to the new rules. They could ensure they are running no updates and security patches since January 2019, a bad idea in terms of security. If they moved applications to Java 17, they could avoid the change, but it would involve significant work and, for many, would not be viable. Similarly, the option to upgrade all Java applications to the latest release of OpenJDK is most likely off limits, owing to the work involved. In the viable-but-hard-work category come the options of switching to third-party Java products and moving all unlicensed Oracle JDK workloads to Oracle Cloud Infrastructure. Lastly, users could simply bite the bullet and pay for the new Java SE Universal Subscription, which is simple, but expensive, Gartner said. ®

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