Blog Java the new Cash cow for Oracle
Java; the new Cash cow for Oracle
Door Insight Editor / 6 Dec 2023 / Onderwerpen: Software Software Asset Management (SAM)
Door Insight Editor / 6 Dec 2023 / Onderwerpen: Software Software Asset Management (SAM)
Oracle's recent changes to its Java licensing model have been a cause for concern for many businesses and individuals that rely on the popular programming language. In the past, Java was available for free in most use cases. However, in January 2023, Oracle stepped away from a usage related licensing to a Universal Employee model which created a shock in the market. Businesses that have any Java usage today, could end up paying for all their employees, which could result in paying 2 to 20 times more when comparing to the previous metrics (NUPs and PROC, which were usage based).
This new licensing has caused concerns for many businesses relying on Java for their daily work. Most companies did not budget for these costs, while others may not agree with the pricing structure. This change will push businesses to seek out alternatives for Oracle Java, which will likely have a negative impact on Java's dominance in the market. Nevertheless, Oracle made 2 billion in Java Revenue last fiscal year, which, given that the metric is subscription based, is all booked as cloud revenue.
As with any change, it will take time to see the full impact of Oracle's new licensing policy on the market. We see most businesses still use Java v8 for a variety of Applications (between 75 – 95% of the usage). This also impacts the suggested solutions to overcome the Oracle Java issue.
We see 7 possible solutions for Java:
We see most clients opting for options 1 or 2, depending on their specific requirements and internal policies. Security considerations are why Option 3, downgrading to Java 8 update 202, are sometimes considered however most often only as a (very) short term solution.
Option 4, Upgrading to Java v17 or higher, is most of the time not considered a valid solution, since from Java v11 onwards, Oracle started modernizing the Java programming language, declaring a lot of functionalities obsolete and consequently removed them from version 11 release. The impact is that most Java 8 applications will not work on Java 17 (or higher) without extensive redevelopment.
The remaining solutions all include some kind of engagement with Oracle. These are not advisable, as these will likely have a significant impact on your financial risk, budgeting and/or roadmap.
For sure, paying Oracle is the easiest option to solve your Java issue. Especially if your internal Security Policies require available support on products in use, buying the Java SE licenses will deal with that requirement. However, it is by far the most expensive solution and there might be some questions as to the value of such a decision. Assuming you will continue using Java 8 (as you might have done for the last 15 years), there seems to be very limited value to get from Oracle Support. As Support is limited to 4 patching rounds per year, which solve only very rare and niche issues, this looks like a very expensive solution (especially if you count all your Java specific Support tickets, you have issued the last 15 years). In order to save money, you might consider applying for an exception to the Security policy.
When predominantly using Java 8, you should ask if you find the significant fees you need to pay to Oracle value for money. Paying the Java SE Subscription fee should only be considered an alternative when it is determined that switching to other Java is more costly (money and/or effort wise).
There are two main questions to consider:
If the answer to both questions is affirmative, you could save money and apply for a non-supported version of Java, however internal security policies or local legislation might prevent this.
Should you require continued support however, the most popular supported Java distributions for on-premise deployments, are Redhat and Azul Zulu. Main benefit for these Java versions is the support and knowledge base they provide to do the migration and remove the Oracle Java installations successfully.
For usage in the Public Cloud the relevant versions are Azure’s Microsoft Build for OpenJDK, Corretto for AWS and Oracle Java (!) for OCI. All these Java versions are supported by the platform (so no additional fee will apply). Please note that, license-wise, deploying Java on any other Public Cloud platform is not allowed by Oracle.
For those clients that already have a subscription, based on the old metrics (NUP and PROC), a new challenge seems to occur. Although Oracle has committed that these clients will be able to keep the old metrics at their next renewal, these customers are receiving unsolicited requests from the Java Sales, usually supported by GLAS people (former LMS), with the aim at verifying that the correct values are being ordered. A special interest is shown in the VMware architecture, and clients are pushed to run scripts or provide detailed information to show they are correctly renewing their subscriptions.
Although these are not official audits, as no notification letters or official announcements are being sent, the implication is that client cooperation is the only way to get your subscriptions renewed on the old metrics. We see no contractual or legal ground why clients should cooperate with these requests and send any data to Oracle.
For next year, 2024, we doubt whether Oracle will still allow to renew on the old metrics, as we notice the Java Sales keep pushing for clients to upgrade to the new Universal Employee model (where both Oracle and the Java Sales will make 5 – 100 times more money per year!).
What does Insight advise when you have Java Subscriptions based on NUPs and PROCs:
As a head start Insight can support you in creating a Java strategy that will lead to control and prevent future exposure (governance). E.g., when new hardware or software comes in, it should not have any Oracle Java components. This strategy should be known by anyone in your organization, such as architects, developers, DBAs,…
If you seek support for solving your Java issue, do not hesitate to reach out to your Insight contact for more information.
Joost Bakker
Executive Licensing Consultant for Oracle
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