Understanding Oracle Java License Changes: What Businesses Need to Know

Oracle has made significant changes to its Java licensing model, which has impacted many businesses. If your company uses Oracle Java, it is important to understand how these changes affect costs, compliance, and future software planning. This article explains the new licensing model, its impact, and what businesses can do to adapt.

What Changed in the Oracle Java License?

Before January 2023, businesses using Oracle Java were charged based on two licensing metrics:

• Processor-Based Licensing – Applied to server environments.
• Named User Plus (NUP) Licensing – Charged per user accessing Java software.

However, in January 2023, Oracle introduced a new licensing model called the Employee for Java SE Universal Subscription. This means that companies now have to pay based on the total number of employees rather than the number of Java users or installations.

How Does the New Model Work?

The biggest change is that pricing is determined by the total number of employees in a company, including:

Full-time employees

Part-time employees

Contractors

Outsourced workers

Even if only one employee uses Oracle’s commercial Java software, the company must pay for all employees. This new model has resulted in significant cost increases for many organizations.

Impact on Businesses

The shift from usage-based pricing to employee-based pricing has increased costs dramatically. Businesses that previously paid based on the number of Java users now have to pay for their entire workforce.

For example:

• A company with 28,000 employees may now face an annual cost of $2.268 million, even if only a small fraction of employees use Java.
• Small and medium-sized businesses (SMBs) may struggle to justify such costs for a tool used by only a few employees.

Oracle’s Strategy Behind the License Change

Oracle is focused on increasing its revenue from Java licensing. Analysts predict that Oracle’s Java revenue may grow to $2 billion annually due to these changes. The company is also pushing businesses into long-term subscription contracts to secure ongoing revenue.

What Can Businesses Do?

1. Explore Alternative Java Options

Fortunately, businesses are not required to use Oracle Java. Several open-source and third-party Java alternatives offer similar functionality without the high costs. Some popular alternatives include:

Azul Platform Core

Amazon Corretto

Eclipse Temurin

Red Hat OpenJDK

Oracle OpenJDK (Free version)

2. Avoid Long-Term Commitments

Oracle is offering multi-year contracts (5 to 10 years) to lock in customers at high subscription prices. Businesses should avoid these long-term commitments and instead opt for short-term contracts while they evaluate alternatives.

3. Review and Optimize Java Usage

Companies should conduct an internal audit to understand where and how Java is being used. This helps determine whether a full Oracle Java subscription is necessary or if migration to another Java runtime is possible.

4. Consider a License Management Consultant

If your organization is unsure about compliance or cost-saving opportunities, consulting a software license expert can help. A consultant can assess your Java needs, suggest alternatives, and guide you through license negotiations with Oracle.

Conclusion

The Oracle Java license change has increased costs for many businesses, making it essential to explore alternative solutions. Companies should carefully evaluate their Java usage, consider open-source options, and avoid long-term commitments to Oracle. By taking a strategic approach, businesses can save costs and maintain compliance without unnecessary expenses.