Oracle Changes Java SE Licensing Rules and Prices Explode

By Pam Fulmer

For the last several years we have observed a huge uptick in activity by Oracle Sales Teams concerning the licensing of Java SE.  As we have watched how Oracle has approached its customers concerning licensing Java, at times it felt like Oracle was making it up as they went along.  Now with one fell swoop Oracle has completely changed the rules and the pricing around licensing Java by changing its Oracle Java SE Universal Subscription Global Price List.  The changes virtually eliminate the processor metric in most instances (it appears a company would need more than 50,000 Processors, not counting desktops, on which Java is installed and/or running to license by processor) and instead have changed the metric from "Named User Plus" to "Employee".  Now companies licensing Java must count “all of Your full-time, part-time, temporary employees”, AND “all of the full-time employees, part-time employees, and temporary employees of your agents, contractors, outsourcers, and consultants that support Your internal business operations.”​  This means all of these people must be counted for licensing purposes even if they are not using Java software.  The result is potentially a massive price increase for those companies using Java SE.  The change will especially negatively impact large companies with numerous employees, but it will also have a big effect on medium sized companies as well.

For example, as one well known Oracle expert consulting firm has noted, under the new rules a medium sized company with a small Java footprint could see their annual Java cost increase by up to 1,452%.  According to House of Brick, a company with 250 employees with 20 Desktop Users and 8 Java installed processors would pay $2900 annually under the old model and $45,000 a year under Oracle's new model.   The potential impact on Oracle customers is staggering.

The new rules also seem to be a fertile ground for licensing disputes as companies scramble to figure out "all of the full-time employees, part-time employees and temporary employees of your agents, contractors, outsourcers and consultants who support your internal business operations".  And of course, Oracle will no doubt attempt to sow more confusion and chaos where companies are using VMware virtualization software.

On January 24, 2023 Oracle provided a further update on licensing Java SE.  Specifically under a section on its website for Frequently Asked Questions ("FAQ") about Java SE, Oracle says the following: "Customers of the legacy Java SE Subscription products continue to receive all the original benefits and may renew under their existing terms and metrics."​  So it appears that existing Java customers can keep their current agreements, but it is not clear how Oracle will decide to handle any additional purchases.

Tactical Law is reviewing Oracle's recent changes and analyzing how it will impact our clients.  But one thing is for sure--Oracle has ramped up the audits and we predict that Java will be a huge part of Oracle's audit activity in 2023 and beyond.