A significant change to Oracle's Java licensing policy was announced January 23rd 2023. The Java licensing changes are clearly designed to increase revenue for the company rather than provide for a greater or enhanced product. While most well-run businesses seek to increase revenue, with Oracle we must view with a critical eye however, as these types of initiatives typically don’t do much for the customer in the way of added value. In addition to the revenue bump these changes will impact for Oracle, they are clearly also designed to eliminate competition (also not in the customer’s favor).
It is important to note that these changes do not affect Oracle partners who embed Oracle Java in their customer solutions.
Oracle sales have been approaching their customers to push the new model since the announcement and talking to their (and our) clients. The purpose of this article is to summarize what we've learned about Java and outline what you need to do to succeed in it.
Key questions and points to keep in mind when reading this announcement (or any other from Oracle) that we will address:
- What is Oracle NOT saying?
- What does Oracle actually do?
- Getting the most out of Java: 6 steps to protect yourself NOW
- How do the Java licensing changes work?
Oracle's announcement consists of three main points:
- Oracle no longer offers subscription Java on a Processor or Named User Plus basis.
- In addition, going forward, there will only be an employee-based license option available. Oracle requires that all employees, including full-time, part-time, temporary, and contract employees, be licensed if you want to use Java. This policy applies regardless of whether the employees are actually using the software.
- Last but not least, Oracle announced that existing Java subscription clients can renew their Java contracts under the same "terms" and "metrics."
How does all this relate?
As a result of the previous licensing model, customers were in constant conflict with Oracle over Java implementations in VMware environments. How to count and measure Java implementations in VMware environments resulted in significant delays in Oracle's Java sales.
As a result of the new model, people who never use Java will be required to license it.
Based on initial analysis Oracle fees will increase from 2x to 10x! The good news is that there is a way to avoid this cost increase.
Can Oracle tell us what it isn't saying?
Besides the above announcement, Oracle stated that existing Java subscribers will be able to renew under the same "terms" and "metrics." While this may give some assurance, we urge caution and not to assume you will be offered the same deal next year and beyond.
Oracle typically offers some grandfathering, but with caveats. What Oracle has not said is if the pricing will remain the same, and if so, for how long.
You pay $100,000 per year for 100 processor licenses under an annual subscription. How much will you pay next year? Will Oracle raise the price? What happens next year? What if your company grows and you need 10 more processors? Would you be permitted to purchase more? How much will it cost?
It was years ago that Oracle licensed its database software by "concurrent device." They eliminated that metric, but didn't force customers to give it up. However, Oracle refused to sell additional concurrent licenses when customers needed them. As a result, many customers gave up their old concurrent licenses in favor of the newer models.
It is clear Oracle is not announcing much at the moment. The ‘grandfathering’ is Oracle's way of quelling any fears their existing client base may have about the new licensing model. However, Oracle will most certainly restrict, limit, and push their existing clients to adopt the new licensing model. This Oracle tactic must be anticipated.
Oracle's current activities: What are they?
From all appearances, Oracle's sales teams knew the change was coming and were well prepared with a strategy on how to apply pressure to clients and prospects.
There is no longer any interest among Oracle reps in finding out how big an environment is or whether VMware is being used by the customer. Based on public information, these same salespeople are simply stating how many times customers have downloaded Java from Oracle's website and how many employees they have. The communications will look something like this:
Dear Oracle Java Customer,
Oracle recently announced changes to its Java licensing model to make it easier for you. We need to address your Oracle Java license shortfall. Based on this information, you have downloaded Java 83 times and have 10,000 employees. Based on this information, we can calculate your Java licensing requirements. Let me know when you're available this week so we can work together.
TRANSLATION: We want a bigger share of your IT Spend.
In order to protect your firm, you should know how to respond to Oracle.
Now is the time to take these six steps:1. You should read Oracle's FAQs and price list. There is more detail than what we have highlighted.
Oracle JAVA Pricelist 23 January 2023
2. You should know that Oracle not only monitors what you download from their website, but they know what Java you are running and what you are downloading. Unlike databases, Oracle Java can call home and send information around your usage back to the mothership. Make sure your IT team has this information. Some clients have restricted access to Oracle.com. Others have developed a corporate standard for Java implementation to prevent Oracle from receiving data.
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.
4. In spite of moving away from Oracle completely, you should do regular updates to ensure Oracle's Java software does not re-enter your environment. Downloading and installing the software is very easy. You need to keep up on this.
5. If you are looking to obtain a paid license from Oracle, it is essential to be aware of the usage and its cost. Oracle has a unique price discounting system that ranges from 0% to 100%. Should Oracle declineany of your offers, then evaluate the cost of migrating off their software package. It is important to comprehend that Oracle's valuation is not solely based on their price list. The worth of the product is determined by its use and/or migration alternatives. Should you take in these elements, you will be able to make an informed decision on whether or not to purchase the Oracle license or switch vendors.
6. Existing Java Processor and Named User Plus subscribers should request a renewal quote from their Java representatives without delay, even when several month before the expiry date. Initiating that quote request will get get an accurate picture of Oracle's propositions for the future. As previously mentioned, there is still much that wasn't announced by Oracle. Your renewal date is when Oracle will have to reveal its strategies - when you have the quote, as well as data regarding your current utilization of their product, it allows you to make an informed choice on your next steps.
Changes to Oracle that are significant.
As you can see, this Oracle change is significant and will affect your usage of their product and fees you pay to them. You can take control and manage your opportunity and risk, or Oracle will do it for you. In order to achieve your corporate goals cost-effectively, you must understand your usage, look at alternatives, and plan your negotiation strategy.
Whether you use Oracle, Azul, Red Hat, Corretto, OpenJDK, or any other Java implementation, NET(net) can help you understand that usage and support you in making objective decisions that are best for your organization.
Founded in 2002, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get, and keep more economic and strategic value in their technology supply chains. Over the last 20 years, NET(net) has influenced trillions of investment, captured hundreds of billions of value, and has helped clients cost and value optimize XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, Telecommunications, and other areas of IT spend. NET(net) has the experience you want, the expertise you need, and delivers the performance you demand and deserve. Contact us at firstname.lastname@example.org, visit us online at www.netnetweb.com, or call us at +1 (616) 546-3100 to see if we can help you capture more value in your IT investments, agreements, deployments, and relationships.
NET(net)’s Website/Blogs/Articles and other content is subject to NET(net)’s legal terms, offered for general information purposes only, and while NET(net) may offer views and opinions regarding the subject matter, such views and opinions are not intended to malign or disparage any other company or other individual or group.