Recent Oracle Java licensing updates:
- 2019: Oracle introduced a subscription model for Java updates after Java 8, patch 211.
- 2021: Oracle released the No-Fee Terms and Conditions (NFTC), allowing free commercial use starting from JDK 17.
- 2023: Oracle transitioned to the new Employee for Java SE Universal Subscription model, replacing the older licensing models (Named User Plus and Processor).
Read our Java Licensing FAQs
**ALERT** Has Oracle contacted you about a Java license?
Download our Oracle Java Audit white paper to learn how to respond to and avoid common pitfalls.
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- Recommendations for responding to an Oracle soft audit
- Oracle’s soft audit process
- Oracle’s formal audit process
- The kind of data Oracle may have on your organization’s Java product downloads.
Oracle Java Licensing Evolution (2019–2024)
2019 – End of Free Java & Introduction of Subscriptions:
In January 2019, Oracle ended free public updates for Java SE 8 in commercial settings. Businesses using Oracle’s Java SE after that point had to purchase a Java SE subscription or risk running unsupported, non-compliant software.
In April 2019, Oracle rolled out a new Oracle Technology Network (OTN) license for Java, which made the Oracle JDK free only for certain uses (personal, development, and testing) but not for production in a business environment.
This represented a significant shift from the prior Binary Code License model, where Java was essentially free for all uses.
Suddenly, companies running Java in production or as part of commercial software deployments needed a paid license or an alternative JDK distribution.
Oracle’s licensing shift caught many off guard, and 2019 saw a scramble to either pay for Java SE subscriptions or migrate to open-source Java alternatives, such as OpenJDK. Oracle also began ramping up compliance efforts around Java at this time, treating Java like any other revenue-generating software product.
2021 – No-Fee Terms (Temporary Free Use): Oracle responded to backlash by introducing Java 17 under a “No-Fee Terms and Conditions” (NFTC) license in September 2021.
The NFTC license made the latest Long-Term Support (LTS) Java version free for all users, including in production, but only for a limited window.
The deal was that you could use the newest LTS release (Java 17 at the time) at no cost until one year after the next LTS was released. This meant that organizations could initially run Oracle JDK 17 at no cost.
Still, once Java 21 was released and had been available for a year, the free ride for Java 17 would come to an end, requiring a subscription for further updates.
Oracle essentially provided a moving target: stay on the latest version to remain free, but if you lag behind on updates once the grace period lapses, you must start paying.
This NFTC strategy was Oracle’s way of keeping Java users from fleeing entirely by offering a temporarily free option, albeit without long-term support or security patches beyond the cutoff date.
Importantly, older Java versions (8, 11) did not become free under NFTC – those still required a subscription for updates.
2023 – Employee-Based Licensing Overhaul: In January 2023, Oracle introduced a sweeping change to Java licensing with the launch of the Java SE Universal Subscription model.
This new model eliminated the legacy metrics (Named User Plus and Processor) and replaced them with an employee-count-based metric.
Under this scheme, any organization that wants to use Oracle Java (beyond the NFTC free period) must license Java for all its employees. “Employees” are broadly defined – typically including full-time staff, part-time workers, and contractors (essentially anyone on payroll or working on your company’s behalf).
This effectively acts as an enterprise-wide license: you pay a monthly fee per employee, and in return, you can deploy Oracle Java on any number of servers, PCs, or devices within the company.
While this simplifies compliance (you no longer have to count specific installations or CPUs), it dramatically increases costs for many.
Companies with thousands of employees, but perhaps only a dozen Java applications, were suddenly facing bills for every single employee.
Oracle’s 2023 price list sets the Java SE subscription at $15 per employee per month for smaller organizations (with fewer than 1,000 employees), with volume discounts reducing the cost to around $5–6 per employee for very large enterprises.
For example, a mid-sized business with 500 employees would owe about $90,000 per year (500 × $15 × 12) under this plan – even if only a handful of those employees use Java in their daily work.
The new model has been a source of sticker shock for many CIOs and CFOs, often costing two to five times more than what they paid under the old model.
2024 – End of Java 17 Free Period & Continued Enforcement:
Fast forward to 2024: the free update period for Java 17 under NFTC is set to end (Oracle has confirmed that after September 2024, no further free public updates for Java 17 will be provided).
Organizations needed to either upgrade to Java 21 (the next LTS, which is free under NFTC until its window closes) or start paying for Java 17 support via subscription. By 2024, Oracle also made it clear that legacy Java SE subscriptions on the old metrics would no longer be renewed.
Customers approaching renewal on a Named User Plus or Processor Java contract were being informed that they must transition to the employee-based Universal Subscription to remain compliant.
Meanwhile, Oracle’s compliance efforts have only intensified: reports indicate a surge in both “stealth” audits (informal license reviews) and formal audits targeting Java usage
Legacy Java SE Licensing Metrics (Named User Plus & Processor)
Under the pre-2023 Java SE Subscription model, Oracle offered Java licenses in two metrics:
- Named User Plus (NUP): A per-user licensing model, typically used for desktop or client access. Each individual who had access to a system running Oracle Java was required to have a license. Oracle’s Java SE Desktop Subscription was priced around $2.50 per user per month (roughly $30 per user annually). Notably, the license was tied to the person, not the device – if 10 employees shared a single Java-based application on a terminal server, all 10 needed their own NUP licenses. NUP had a minimum license count per organization (and for servers, Oracle often imposed a minimum number of NUP licenses per processor, usually 25 NUP per CPU in other product contexts).
- Processor: A per-processor (per CPU core, adjusted by Oracle’s core factor) license for servers running Java. This worked like Oracle database licensing – you had to license each processor on each server where Oracle Java was installed (counting cores with a multiplier). The Java SE Subscription for servers was listed at $25 per processor per month (about $300 per processor annually) at the time. Therefore, a server with eight cores (assuming a factor of 0.5 per core, for example) would require four processor licenses, costing approximately $100/month under this model. The processor metric was often chosen for back-end or server-side Java deployments where counting individual users wasn’t feasible.
These legacy licenses were typically sold as annual subscriptions (although initially, Oracle also offered perpetual licenses with support; most customers adopted the subscription format after 2019).
Understand your audit rights under the new licensing terms.
Legacy vs. New Model Comparison: To illustrate the shift, here’s a comparison of the old and new Java SE licensing models:
| Metric | Legacy Java SE Subscription (pre-2023) | Java SE Universal Subscription (2023+) |
|---|---|---|
| License Units | Named User Plus (per named user) and Processor (per CPU core factor) | Employee count (per all employees in the company) |
| Scope of Coverage | Only licensed users or specific licensed servers are covered. | All usage across the enterprise is covered once employees are licensed. |
| Cost Basis (List Price) | ~$2.50 per user/month; $25 per processor/month. | $15 per employee/month (tiered down for larger orgs). |
| When It Applies | 2019–2022 Java SE subscriptions (no new sales after Jan 2023). | Mandatory for any new Java SE subscription as of 2023. |
| Typical Impact | Costs scale with actual Java usage (number of users or CPUs in use). | Costs scale with organization size, not actual usage – can be much higher if few use Java. |
| Renewal & Audit | Renewals were possible until 2023; audits focused on unlicensed installations beyond user/CPU counts. | No alternative at renewal – Oracle forces move to this model; audits now target anyone not on this model. |
Learn how Java 8’s licensing changed in 2019.
In January 2023, Oracle essentially stated that there would be no more NUP or Processor subscriptions.
If you were mid-contract on legacy metrics, you could run them to expiration. Still, after that, your only option to stay compliant was to shift to the employee-based universal subscription.
Some customers with legacy Java licenses felt blindsided at renewal time: Oracle would initiate a review of their deployment (often effectively an audit) as the contract expiry approached, then inform them that the old licenses couldn’t be extended.
Many report that Oracle used this opportunity to identify any under-licensed usage and threaten back charges unless the customer “remedied” the situation by buying into the new model.
Read Oracle New Java SE Universal Subscription (2023): An Advisory for SAM Managers and Licensing Professionals.
The New Employee-Based Java SE Universal Subscription
Oracle’s Java SE Universal Subscription (introduced in 2023) requires licensing Java based on the number of “Employees” in the organization. This model treats Java like an enterprise-wide IT service. Key points of this model:
- All Employees Count: You must count every employee, defined broadly as all full-time, part-time, temporary workers, and, in many cases, contractors or outsourcers who work for the company. Essentially, if your company has 5,000 people (including contractors) on payroll or providing services, you need 5,000 Java licenses – regardless of whether 50 or 500 of them ever use Java.
- Unlimited Java Use: In exchange, Oracle doesn’t care how many instances of Java you run. You can deploy it on any number of servers, PCs, VMs, etc., across the organization without needing to track each installation. The license is enterprise-wide, eliminating the need to track specific machines or users. This can simplify compliance management for organizations that truly have Java everywhere.
- Price Tiers by Size: The cost per employee per month decreases in tiers as your headcount grows (to make it more palatable for large enterprises). Below is the pricing tier breakdown as of 2023:
| Total Employee Count | Cost per Employee/Month | Effective Annual Cost per Employee |
|---|---|---|
| 1 – 999 | $15.00 | $180 (e.g. 500 emp ⇒ ~$90k/year) |
| 1,000 – 2,999 | $12.00 | $144 (e.g. 2,000 emp ⇒ ~$288k/year) |
| 3,000 – 9,999 | $10.50 | $126 (e.g. 5,000 emp ⇒ ~$630k/year) |
| 10,000 – 19,999 | $8.25 | $99 (e.g. 15,000 emp ⇒ ~$1.49M/year) |
| 20,000 – 29,999 | $6.75 | $81 (e.g. 25,000 emp ⇒ ~$2.03M/year) |
| 30,000 – 39,999 | $5.70 | $68 (e.g. 35,000 emp ⇒ ~$2.38M/year) |
| 40,000 – 49,999 | $5.25 | $63 (e.g. 45,000 emp ⇒ ~$2.84M/year) |
| 50,000 or more | Custom (Negotiable) | Usually under $5 per employee (case-by-case deals) |
Even at the lower rates for huge companies, the math is substantial – e.g., a 50,000-person company might negotiate approximately $4 per employee per month, still resulting in approximately $2.4 million per year.
For mid-sized firms, it’s easy to end up in the six or seven figures annually for Java, which used to be a free utility. Analysts and experts have noted that this model tends to cost several times more than the legacy approach in many scenarios.
Only organizations that truly have Java on every desktop and server might break even or benefit from the simplicity.
Practical Impact: Organizations that historically deployed Java on only a few servers or for specific teams now face the cost of treating every employee as a Java user.
This creates a huge incentive to reduce or eliminate Oracle Java usage if possible. On the other hand, if a company is reliant on Oracle’s Java (perhaps for support or specific features), it must budget for these subscription costs in the future.
Oracle Products vs. Third-Party Applications: Who Needs a Java License?
One point of confusion is whether a Java SE license is required for software that comes with Java or requires Java.
Oracle has clarified that if you are using an Oracle product that includes Java, you are entitled to use Java as part of that product without a separate Java SE subscription.
For example, Oracle’s products, such as WebLogic Server, Oracle Database, and Oracle E-Business Suite, all run on Java.
Customers paying for support for those Oracle applications can use the embedded Java runtime for that application’s purpose. Oracle won’t require a separate Java SE subscription in those cases (it’s essentially bundled).
However, this is a limited exception. Most third-party software vendors do not include Java licenses with their applications.
Many independent software vendors built their products to run on Oracle’s JDK and even recommend Oracle Java for best compatibility.
Still, only a handful of major vendors (IBM, SAP, and a few others that had special distribution agreements) bundle a Java license for their customers.
Read if OpenJDK is free or not.
Compliance Crackdown: Oracle’s Audit Tactics and Retroactive Claims
Oracle Java Audits: How They Work and What Triggers Them
Oracle is notorious for its license audits, and Java has now become another lucrative target for these audits.
In the years since the licensing changes, Oracle’s audit and compliance teams have significantly stepped up enforcement of Java.
Some industry estimates suggest Oracle has generated on the order of billions of dollars (USD) in revenue from auditing customers, with Java now contributing significantly to that figure.
While Oracle doesn’t publicly break out “audit fines” as revenue, the aggressive posture indicates compliance is a profit center, not just a license assurance activity.
A Gartner study noted that over 70% of Oracle customers eventually face some license compliance issue, and the average audit settlement costs run into the millions of dollars.
How Oracle Targets Java Users:
Oracle offers various methods for identifying organizations that use Oracle Java without a subscription.
A key method is through download records – when someone from your company downloads Oracle JDK or updates from Oracle’s website, they often must log in with an Oracle account, or their access can be tracked via IP address. Oracle can correlate these downloads to corporate domains or network ranges.
If a company without a Java subscription has been downloading patches or new JDK versions, Oracle likely knows.
So if you receive a seemingly out-of-the-blue email from Oracle about Java licensing, it’s probably not random – they have a reason to believe your firm is using Java commercially.
Oracle’s sales teams also monitor customer support contracts: if you have Oracle products but never bought Java licenses, they may suspect you’re running Java somewhere.
And, of course, ending a Java subscription or declining to renew essentially waves a red flag, inviting Oracle to verify that you have truly removed or replaced their software.
Soft Audit (“Friendly” Approach) vs. Formal Audit:
Oracle often starts the compliance process in a low-key way. You might get a call or email from an Oracle sales representative or Java specialist offering a “discussion” about Java usage or informing you of the new licensing model.
They may ask if you’re aware of the rules and suggest a meeting to review your deployments. This is the “soft” audit stage – no official audit notice has been issued yet, but make no mistake, it’s a fishing expedition for compliance gaps.
At this stage, Oracle representatives might drop hints that they have data (e.g., “Our records show downloads by your team…”) to pressure you into disclosing usage.
They aim to create a sense of urgency and concern, nudging you to engage. It’s advisable to handle these interactions carefully: do not volunteer information hastily, and consider involving your legal or licensing advisors early.
You are not obligated to self-audit just because Oracle asks casually.
If you don’t respond favorably or Oracle strongly suspects non-compliance, the tone escalates. Oracle will then present a compliance ultimatum, often by sending a written summary of what they believe you owe.
Commonly, this is a shockingly high quote for Java licenses, calculated as if you should have been paying all along.
Oracle’s proposal usually includes retroactive fees: they calculate what it would have cost if you had a subscription during the past X years of usage and demand that as part of the settlement.
For instance, if your company used Oracle Java from 2020 to 2022 without paying, Oracle might bill you for three years of subscriptions for your entire environment, retroactively. Multi-million dollar figures can appear seemingly out of nowhere.
We’ve seen cases of initial Java compliance quotes ranging from $4M to $10M, and even $15M, from Oracle for back licensing and new subscriptions, intended to stun the customer.
Negotiations can sometimes significantly reduce these amounts, especially if you demonstrate plans to migrate off Oracle or agree to a new subscription in the future.
Escalation to the C-Suite and Formal Audit:
If the customer still refuses to pay, Oracle’s next move is to raise the stakes. They may start copying higher-ups on correspondence – it’s not uncommon for a company’s CFO or CEO to receive letters from Oracle detailing the compliance exposure and “urgent” need to resolve it.
These letters will reference contractual obligations and may invoke the audit clause of your Oracle agreements.
The involvement of executive leadership is a tactic: Oracle knows that a multi-million-dollar risk will capture top management’s attention, possibly pressuring the IT and procurement teams to quickly find a solution.
At some point in this escalation, Oracle’s Global Licensing and Advisory Services (GLAS) or Business Practices compliance team takes over from the sales team. A senior compliance manager.
This is when you’ll receive a formal audit notice a letter invoking Oracle’s contractual right to audit your software usage, specifying Java as the audit scope, and typically giving a 45-day notice before the audit commences.
Once a formal audit is launched, it becomes a very structured process: Oracle will send detailed scripts or tools for you to run to collect data on all Java installations, and they will demand records and proof of licenses.
Communication is strictly through Oracle’s auditors or lawyers, and the tone is legalistic. Essentially, Oracle is now in full enforcement mode, and it intends to find and charge for every instance of unlicensed Java it can.
Oracle auditors are trained to maximize the number of compliance findings. They will look for any machine or VM that ever had Oracle’s JDK installed, any desktop that might still be running an old Oracle Java, or any developer laptops with Oracle JDK downloads.
Retroactive Claims and “True-Up” Fees:
Oracle’s standard stance is that even if you uninstall Oracle Java after being caught, you still owe for past unlicensed usage.
They often calculate back 2-4 years of fees. There is no official “penalty” fee in Java (unlike some software, where formal penalties are in place); however, effectively, backdating the subscription cost serves as a penalty.
They may also attempt to charge back support if it were another Oracle product. For Java, it’s usually framed as just requiring you to purchase the subscriptions for the lapsed period.
This can feel unfair – companies say, “We stopped using Oracle Java now, why pay for past years?” – but Oracle leverages its contractual language, stating that any use without a license constitutes a breach. The only way to resolve it (short of a lawsuit) is to pay for those licenses after the fact.
Legal Threats if Unresolved:
In rare cases where a customer refuses to cooperate, Oracle reserves the right to pursue litigation. They may involve Oracle’s legal department and suggest that if you don’t agree to a resolution (i.e., give them money), they will take legal action to recover damages for copyright infringement or breach of contract.
This is usually the final stage of the showdown. It seldom reaches actual court – both Oracle and customers prefer to settle – but the threat is daunting and often enough to force an agreement.
Audit Frequency and Triggers:
Any organization that declines to renew a Java subscription or refuses to migrate to the new model should be prepared for Oracle to conduct an audit.
This applies whether you had a legacy NUP/Processor deal or even if you sign an employee-based deal and later decide to terminate it. Oracle views non-renewal as a sign that you might continue using Java without paying.
Review common audit triggers and how to avoid them.
The bottom line is that Oracle’s audit machine for Java is in full swing – proactive preparation is key rather than hoping to fly under the radar.
How Customers Are Responding: Moving Away from Oracle & Other Strategies
Faced with rising costs and compliance risks, many Oracle customers are rethinking their Java strategy.
Here are common responses and options organizations are pursuing:
- Migration to Open-Source Java Alternatives: The most widespread reaction is to move off Oracle’s Java distribution and adopt open-source or third-party JDKs. The good news is that Java, as a technology, is not proprietary to Oracle – the OpenJDK project provides a free, open-source implementation that is nearly identical to Oracle’s JDK (Oracle’s JDK itself is based on OpenJDK with some add-ons). Since 2019, numerous vendors and communities have provided free or low-cost Java builds, including Adoptium (formerly AdoptOpenJDK), Amazon Corretto, Azul Zulu, IBM Semeru, and Red Hat OpenJDK, among others. Many enterprise software vendors also certify their products on these OpenJDK distributions. By switching to a non-Oracle JDK, companies can avoid Oracle’s license fees altogether. There might be migration effort involved (uninstalling Oracle JDK and installing an alternative, testing compatibility), but in most cases, Java bytecode runs the same on OpenJDK. Over the past few years, a significant portion of the Java community has standardized on OpenJDK binaries for production use, thereby sidestepping Oracle’s paywall. Even those who needed paid support have found third-party support vendors (like Red Hat or Azul) offering support for OpenJDK at a fraction of Oracle’s cost. Moving to OpenJDK or another vendor’s Java is the top choice for cost avoidance. It’s worth noting that Oracle’s NFTC free license for the latest version is effectively just Oracle’s branded OpenJDK without long-term updates – many prefer to stick with a true open-source or long-term supported option rather than depend on Oracle’s next twist.
- Staying on Older Java Versions (Legacy Free Usage): Some organizations have chosen to stick with Java versions released under the old free license (BCL) and not update them. For instance, continuing to run Java 8 update 202 (the last public free update) indefinitely without applying newer patches meant, in theory, no new license requirement. This path is risky – it leaves systems on outdated Java builds with known security vulnerabilities – but a few companies opted to “freeze” their Java installations to avoid triggering the need for a subscription. Similarly, others who had downloaded Oracle JDK 8 or 11 before 2019 under BCL have continued to use those builds. While technically permitted under the original license terms, this approach is not sustainable from a security perspective and may violate corporate security policies. It’s typically a temporary measure while planning a more comprehensive solution, rather than a long-term strategy.
- Upgrading to the Latest LTS for Free (Temporary Relief): Another tactic has been to leapfrog to the newest Java LTS version to take advantage of Oracle’s NFTC free period. For example, some companies that were on Java 8 decided to upgrade their applications to Java 17 in 2022, getting a couple of years of free use until 2024. Now, those same companies might plan to jump to Java 21 in 2024 to gain a couple more years of free support. This “chasing the free LTS” strategy can work if you can frequently upgrade your Java version across all systems. However, it comes with operational overhead – upgrades can be non-trivial, and you are essentially planning to upgrade every 2 years or so to stay within a free window.Additionally, once the free window closes, if you haven’t upgraded, you either run without security patches or must buy a subscription. It’s a bit of a treadmill. Some organizations use this as breathing room while they implement a switch to open-source Java or to retire Java-dependent systems.
- Optimizing and Reducing the Java Footprint: Before deciding whether to pay or move away, organizations must conduct a thorough internal Java usage audit. This means discovering every instance of Oracle Java installed in the environment (servers, VMs, desktops, applications). Many companies discovered they had far more Java installations than they had thought, often installed automatically by applications or left unused on machines. By inventorying and removing Java where it’s not needed, you can shrink the scope of the problem. For example, if an old app that required Oracle JRE is no longer used, uninstall it. Perhaps developers have Oracle JDK on their workstations, but could switch to OpenJDK – implement that policy. Rightsize your Java footprint. Some have also containerized or isolated Java applications to specific servers so that they don’t have Java on every machine. All these steps reduce compliance exposure and potentially the cost if you do have to license some of it. Optimization also involves examining whether all Java workloads are necessary – perhaps some can be decommissioned or migrated to other platforms.
- Negotiating Transitional Deals or Discounts: A few companies have negotiated shorter-term or limited-scope deals with Oracle to ease the transition. For instance, if Oracle audits and you’re caught off guard, you might negotiate a one-year subscription for just a subset of users or processors (even though Oracle’s official stance is “all employees”). Oracle’s sales teams have some flexibility, especially if they fear losing the customer entirely. In some cases, customers negotiated a “settlement” where they pay a lump sum or a one-time license fee for past usage to avoid ongoing subscription costs, essentially buying out the risk. These are complex negotiations, and you need to be very careful – Oracle will generally prefer recurring subscription revenue, so any deviation must be justified (such as convincing them that you will otherwise migrate everything off immediately).
- Exiting Oracle Java Completely: Some organizations make a firm policy decision to eliminate Oracle Java use entirely, to inoculate themselves from future uncertainty. This might involve refactoring applications to use other programming languages or platforms, or ensuring all Java-based software is run with open-source JDKs only. It can be a long-term project, but for companies that dislike being tied to Oracle’s ecosystem, it’s a strategic move. We see this especially in sectors where Oracle audits have left a bad taste – they don’t want to be in that position again.
In general, the customer community has become much more aware of Java licensing pitfalls since 2019. There are user groups, forums, and plenty of knowledge-sharing about how to cope (and stories of Oracle’s aggressive approaches).
The overarching theme is: avoid being forced into the new model if you can, because once you’re paying per employee, it’s difficult to justify that cost if Java isn’t core to your business.
Oracle Software with Included Java SE Licenses
Overview of Included Java SE Licenses in Oracle Products
- Inclusion of Java SE Licenses: Certain Oracle products come bundled with a restricted-use Java SE license. Owning a license for these products might eliminate the need for a separate Java SE license purchase.
- How It Works: Including a Java SE license with Oracle products allows users to utilize Java SE as part of their existing Oracle product environment without incurring extra licensing fees.
Detailed Breakdown of Products with Included Java SE Licenses
- List of Inclusive Products: Oracle offers 100 products with a Java SE license. Below are examples of these products, though this list is not exhaustive:
- Oracle SQL Developer
- JACIC Electronic Bidding Systems
- Oracle Forms
- Oracle E-Business Suite
- Various Oracle WebLogic Server Product client applications
- JD Edwards
Further Examples of Oracle Products, Including Java SE Licenses
- Extensive Product Ranges:
- WebLogic Server Variants:
- Standard Edition
- Enterprise Edition
- Suite
- Oracle Internet Application Server:
- Enterprise Edition
- Oracle Coherence:
- Standard Edition
- Enterprise Edition for Oracle Applications
- Oracle WebCenter:
- Content
- Universal Content Management
- Oracle Business Intelligence:
- Server Enterprise Edition
- Suite Enterprise Edition Plus
- Foundation Suite
- Oracle Data Integrator:
- Enterprise Edition
- Integration Suite
- Service Integrator
- Oracle Identity and Access Management:
- Suite Plus
- Identity Manager
- Access Manager
- Directory Services Plus
- Legacy BEA WebLogic Product Purchases
- WebLogic Server Variants:
Key Considerations
- Savings on Licensing Costs: Understanding which Oracle products include a Java SE license can significantly save licensing costs.
- License Documentation Review: Organizations must review their license documentation to confirm the inclusion of Java SE in their specific Oracle licenses, ensuring compliance and cost-effectiveness.
Oracle Products That Include a Java SE License.
Negotiating a Java Employee Subscription Agreement
Suppose your analysis concludes that you must enter into Oracle’s employee-based Java SE agreement (or you decide the Oracle support and updates are worth it for your enterprise).
In that case, it’s crucial to negotiate the terms wisely.
Here are key negotiation considerations for an Oracle Java subscription contract:
- Understand and Refine the “Employee” Definition: Oracle’s default definition of “employee” is very broad. During negotiations, seek clarity on who exactly must be counted. Can you exclude certain categories of workers? For example, some companies negotiate to exclude part-time contractors or employees of subsidiaries that don’t use any IT infrastructure. If you have non-human accounts (service accounts) or employees on leave, etc., please clarify whether they are included. While Oracle may not allow much deviation, ensuring the definition is crystal clear can prevent future disputes. Also, verify if you need to true up if your headcount grows – some contracts may require periodic true-ups if employee numbers increase. You might negotiate a fixed number instead (e.g., a license for 1,000 employees, even if you hire more, until the next renewal).
- Tier and Volume Discounts: If your employee count is near a pricing tier breakpoint, consider negotiating to move into a better tier. For instance, if you have 1,050 employees, Oracle might try to charge $12 for all; see if they’ll agree to the $10.50 tier, given you’re barely over 1,000. For very large enterprises, consider negotiating for deeper discounts beyond the list tiers. Oracle has been known to offer rates below $5 per employee for its largest customers – use that as leverage if you’re a significant account. Competition helps here: if Oracle knows you are considering third-party support or OpenJDK, they may offer a better price to keep your business.
- Cap Future Price Increases: Try to lock in pricing for multiple years to mitigate potential price increases. Oracle subscriptions typically have an annual price uplift (3-4% standard). Negotiate either a smaller cap or even a flat renewal rate. If you sign a three-year deal, for example, aim for a clause that renewal in year 4 will be at no more than X% increase or the same tier rate, even if your employee count changes. The last thing you want is to budget for $10/employee and then have Oracle raise it to $15/employee at renewal because your headcount dropped below a threshold or simply due to list price changes.
- Include Audit/Compliance Settlements in the Deal: If Oracle has alleged you were non-compliant before signing, negotiate a waiver of past usage claims as part of the new deal. For instance, if they claim you owe 2 years of back fees, you might agree to a slightly higher upfront subscription purchase, and Oracle, in return, states that it releases any claims for past unlicensed use. Get this in writing. Essentially, use the new contract as an opportunity to wipe the slate clean so that you won’t be surprised by a separate invoice for the past after signing.
- Contractual Safeguards: Review the Java agreement for any potential “gotchas”. For example, Oracle might include an audit clause (they usually do) – perhaps you can negotiate a little more notification time or a requirement to mutually agree on an auditor. It might be tough, but express concerns about surprise audits and see if Oracle will agree to some reasonable limits now that you’re paying enterprise-wide. Also, verify the terms around termination – if, after a year or two, you manage to migrate off Oracle Java, can you cancel the subscription, or are you locked in for the full term? Most subscriptions are annual and auto-renew; try to negotiate a convenient exit clause at the end of your term (e.g., the ability to not renew without penalty, and certification that you’ve removed Java).
- Plan an Exit (Even While Entering): It may sound counterintuitive, but if you sign an employee agreement, also plan for how you might reduce their dependency by the end of that contract. Many organizations view the Oracle Java deal as a temporary solution – they alleviate the pressure from Oracle and receive support for a couple of years, while simultaneously working on migrating to alternatives. Negotiate the contract length to align with that plan. A shorter term (1-2 years) might be better if you intend to exit, even if Oracle pushes for a longer commitment. You might pay a bit more per month for a shorter term, but it gives flexibility. During negotiations, only reveal as much as necessary. Oracle will press to understand your Java usage to size the deal; you should obtain their pricing first, then adjust the quantities accordingly.
- Leverage Other Oracle Relationships: If this Java negotiation is part of a broader Oracle relationship (e.g., you also purchase databases or applications), utilize that to your advantage. You might be able to bundle Java into a larger deal or get credits. Conversely, be careful if Oracle offers a deal like “spend on Oracle Cloud and we’ll forgive the Java issue” – they have been known to use Java audits to push cloud credits. Ensure any such trade benefits your strategy, not just Oracle’s sales goals.
In summary, do not take Oracle’s first offer as final. There is often room to negotiate in a Java agreement, especially if you have a clear plan and are willing to say no. Always document any special terms. Given the novelty of the employee metric, every organization’s contract may be slightly different – ensure it’s tailored to your needs and doesn’t contain unwelcome surprises.
Recommendations
Practical Steps for Organizations Navigating Oracle Java Licensing:
- Inventory All Java Usage: Immediately conduct a thorough audit of where Oracle Java is installed in your environment (servers, VMs, desktops, bundled in apps). You can’t make decisions or defend an audit without knowing your footprint. Include version details to identify if those installations fall under old licenses or require a subscription.
- Assess Your Compliance Risk: Determine if you are using any Oracle Java versions in production without a proper license. If so, quantify the exposure (i.e., how many servers, users, or employees would require licensing). This helps prioritize your action plan and negotiation stance.
- Evaluate Alternatives (OpenJDK): If you find Oracle JDK in use, evaluate switching those environments to open-source Java or another vendor’s JDK. Test critical applications on OpenJDK builds to ensure compatibility. In many cases, replacing Oracle Java with a free alternative can be done with minimal disruption, instantly eliminating the need for Oracle licenses on those systems.
- Stay Updated on Licensing Changes: Keep abreast of Oracle’s Java licensing announcements (e.g., upcoming end of free periods for LTS versions, price list changes). For instance, be aware of the dates when a “no-fee” version will start requiring a subscription. Proactively upgrade or adjust before those deadlines to avoid last-minute scrambles.
- Harden Download and Update Policies: Implement internal policies to control downloads of Oracle software. Developers or admins should not freely download Oracle JDK or updates without clearance. Use repository managers or approved open-source sources for Java to prevent the unintentional use of Oracle-licensed binaries, which could later trigger compliance issues.
- Plan Renewal and End-of-Contract Scenarios: If you currently have an Oracle Java subscription (legacy or employee model), begin planning 6-12 months prior to the renewal date. Decide whether to renew, migrate away, or negotiate a new deal. If you plan not to renew, ensure you remove or replace Oracle Java before the contract ends (and document it) to minimize audit risk. Assume Oracle will monitor you as the contract lapses.
- Engage Legal/Expert Support Early: Don’t wait for an official audit letter to get help. If Oracle contacts you about Java, consider consulting with a software licensing attorney or an Oracle licensing specialist. They can guide your responses, help calculate accurate license needs, and counter Oracle’s claims. The cost of expert help is often far less than the consequences of a misstep in an audit response.
- Negotiate from Strength: If you must engage with Oracle for licenses, go into negotiations with a clear understanding of your requirements and alternatives. Whenever possible, create competition – show that you have other options (like third-party support or migrating off Oracle) to push Oracle to a more reasonable offer. Document every conversation and obtain all promises in writing through the contract.
- Monitor Java in Third-Party Applications: Reach out to key software vendors whose products utilize Java and inquire about their approach to Java licensing. If any offer a bundled Java runtime under their license, get that in writing or documentation. For all others, plan as if you need to license Java yourself or switch those applications to use a non-Oracle JDK. This reduces the chance of “hidden” compliance gaps.
- Adopt a Long-Term Java Strategy: Treat Java licensing as a strategic component of your IT roadmap. Decide if your organization wants to stay aligned with Oracle’s Java (and budget accordingly) or if you will invest in being Oracle-free for Java. A deliberate strategy will help justify the necessary investments, whether it’s training teams on OpenJDK support, refactoring systems, or negotiating multi-year contracts.
Checklist: 5 Actions to Take on Oracle Java Licensing
- Discover and Document Java Usage: Compile a complete list of all systems and applications running Oracle Java. Include version numbers and usage contexts (e.g., internal app, third-party product, development only, or production).
- Identify Unlicensed Deployments: For each Java installation, verify whether an existing Oracle support contract or product license covers it. Flag any that are not covered (e.g., Oracle JDK on a server with no Java subscription). These are potential compliance exposures to address.
- Implement Alternate Java Solutions: Wherever possible, replace Oracle JDK with an OpenJDK distribution or another vendor’s JDK. Test critical workloads on the alternative and roll it out, starting with non-production systems and then moving to production systems. This step will reduce or eliminate reliance on Oracle licensing.
- Update Policies and Train Staff: Establish a policy that prohibits downloading or installing Oracle Java without prior approval. Educate your IT staff and developers about the licensing changes – they should be aware that using Oracle’s JDK incurs cost implications. Make sure patches and updates come from approved (ideally non-Oracle) sources going forward.
- Engage in Advance Planning: If you anticipate needing to negotiate with Oracle (for a new subscription or at renewal), start preparations early. Gather your usage data, define your negotiation goals (budget, terms), and consider enlisting a licensing expert to develop a negotiation strategy. Have a clear timeline for either migrating off Oracle Java or finalizing a deal, so you’re not caught off guard by an Oracle audit or contract deadline.
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FAQ
Q1: What were the major Oracle Java licensing changes in 2019 and 2023?
A: In 2019, Oracle stopped providing free updates for Java 8 for commercial use and introduced a subscription model, meaning businesses had to pay for Java SE updates and support going forward (unless using it only for personal, development, or other limited purposes under a new OTN license). Then, in January 2023, Oracle changed the model again by eliminating the old user/device-based subscriptions and moving to an employee-based licensing model (Java SE Universal Subscription). Under this 2023 model, companies must license Java for their total number of employees, rather than counting specific users or processors. This effectively turned Java licensing into an enterprise-wide agreement, often resulting in dramatically increased costs for customers.
Q2: If we use a third-party application that runs on Java, do we need an Oracle Java license?
A: In most cases, yes – if the application vendor hasn’t explicitly provided a license for Java. Oracle allows certain vendors (like some big ones such as IBM or SAP) to distribute Java with their products, which covers you for using Java with that specific application. However, the vast majority of third-party software makers do not include Java licenses. That means if you install Oracle’s JRE/JDK to run a third-party app in production, you are responsible for obtaining the necessary licensing. Always check the application’s documentation or with the vendor: if they have an arrangement with Oracle, it will be stated. If not, you should assume an Oracle Java SE subscription (or an alternative Java runtime) is needed for compliance. On the other hand, if you’re using an Oracle product (Oracle DB, WebLogic, etc.), Oracle’s support contract for that product usually entitles you to use Java for it without a separate Java SE subscription. Always verify each case, because “Java included” is the exception, not the rule.
Q3: What happens if we choose not to renew our Oracle Java subscription?
A: If you don’t renew an Oracle Java subscription (or decline to transition to the new employee-based model at renewal), you must stop using Oracle Java in your environment to remain compliant. Practically, this means uninstalling Oracle JDK/JRE from systems or replacing it with an alternative. Be aware that Oracle closely monitors non-renewals – it’s common for Oracle to initiate a compliance check or formal audit soon after a customer drops a Java subscription. They want to ensure you truly removed it and aren’t continuing to use it without paying. So, if you plan not to renew, prepare for a potential audit. Ensure you have evidence (such as records of uninstallations and new JDK installations) to provide to Oracle if needed. In short, you can say no to renewing, but you must eliminate Oracle Java usage (or downgrade to versions that don’t require a subscription) by the end of your contract. Otherwise, Oracle may hit you with back-dated charges in an audit. Many organizations that decide not to renew also engage experts to help demonstrate their compliance during the exit process.
Q4: How can we reduce or avoid the costs of Oracle’s Java licensing?
A: There are several strategies to minimize paying Oracle for Java:
- Use OpenJDK or Third-Party Java Builds: Switch your Java installations to open-source versions (like Eclipse Temurin/Adoptium, Amazon Corretto, Azul, etc.), which are free to use. This immediately avoids Oracle license fees while still keeping you on secure, updated Java versions.
- Only use Oracle Java where truly necessary: It may be that some niche cases require Oracle’s build (for example, for specific Oracle products or support). Restrict the use of Oracle JDK to specific cases and use alternatives in other instances. This way, if you do have to buy a subscription, you can potentially reduce the scope (though remember Oracle’s new model is all-or-nothing, so this tactic was more useful under legacy licensing).
- Stay on the latest Java LTS under NFTC: As a temporary measure, you could continuously upgrade to the newest LTS release, which Oracle offers for free under the No-Fee Terms for a limited time. This avoids fees for a couple of years at a time. The downside is you must upgrade promptly when a new LTS comes out and the old one’s free period expires. It’s a form of avoidance, but it requires diligence and may not be practical for all environments.
- Negotiate a smaller deal or shorter term: If you have leverage, you might negotiate a custom Java licensing deal with Oracle (for example, a one-year license for a subset of users just to cover a transition period) at a discount. Oracle might not advertise it, but they can be flexible if they believe you will otherwise drop Java entirely. Ensure any such deal is in writing and limits your obligations.
Ultimately, the most effective way to minimize Oracle Java costs is to standardize on non-Oracle Java and only pay for support from third parties as needed. This eliminates Oracle’s audit threat for Java. Many companies have made this a policy decision after analyzing the potential savings.
Q5: What key points should we negotiate if we decide to sign Oracle’s Java “Employee” subscription?
A: If you’re entering Oracle’s Java SE Universal Subscription, focus on these negotiation points:
- Employee Count Definition: Ensure the contract clearly defines who is considered an “employee” and identifies any groups that can be excluded, such as those who don’t utilize IT resources (e.g., contractors who never access your systems or seasonal workers). Oracle’s default is inclusive, but no harm in asking for exclusions or at least clarity (to avoid future disagreements).
- Pricing and Discounts: Negotiate the per-employee price. Use the tier system to your advantage – if you’re near a lower price tier, push to get that tier’s rate. If you’re a large customer or have other Oracle expenditures, ask for a discount better than the list price. Oracle sales reps have some flexibility, especially if they fear you’ll opt out entirely.
- Multi-Year Protections: Consider locking the rate for multiple years or capping increases. For instance, if you sign a 3-year deal, you might get Oracle to commit to no more than a 3% annual increase or even a flat fee for that term. Avoid open-ended exposure to annual price hikes or changes in employee count.
- Termination and True-down: Negotiate what happens at the end of the term. Ideally, have the freedom not to renew without penalties. If you expect your employee count to drop (say, through divestiture or layoffs), see if the contract allows a reduction in the licensed count at renewal (Oracle might not allow mid-term reductions, but perhaps at renewal, they’d adjust if headcount significantly changed).
- Audit Waiver for Past Use: If Oracle is transitioning you from old usage to this new deal, obtain language that resolves any past compliance issues. E.g., “Oracle agrees no further fees are owed for Java usage before this agreement’s start date.” This ensures you won’t receive a separate invoice for old usage after you sign.
Additionally, ensure you understand any renewal auto-notice clauses (don’t miss a window to cancel if you plan to), and coordinate the Java agreement with your broader Oracle relationship. If you have an Oracle Account Rep, sometimes bundling the Java negotiation with a larger deal (database or cloud renewal) can yield better discounts – just be cautious to evaluate that holistically. In all cases, enter negotiations well-informed about your actual Java usage and with a walk-away plan (e.g., using OpenJDK) so that Oracle knows you have an alternative. This will give you the best chance of getting a fair deal.
Related Articles Section
- Oracle Java Licensing Models – Explains Named User Plus, Processor, and the new employee‑based metrics, with examples of when each applies.
- Oracle Java Licensing FAQ – Answers common questions about Oracle’s licensing rules, subscription terms and audit process.
- 15 Key Steps to Prepare for Exiting Your Oracle Java Employee License Agreement – Outlines the actions needed to gracefully exit Oracle’s employee‑based subscription model without incurring penalties.
- Legacy vs. Universal Java Licensing – Side‑by‑side comparison of legacy per‑user/per‑processor licensing and the new employee metric, with cost examples.
- Negotiating Oracle Java Employee Licensing – Practical strategies for negotiating employee‑based Java subscriptions and avoiding audit pitfalls.
- Renewing Your Oracle Java Employee License Agreement – Preparation tips for renewals, including how to leverage optimization to secure better terms.
- How Is Oracle Java 8 Licensed? – Explains licensing rights for Java 8 before and after January 2019, and when you still need a subscription.
- The Hidden Costs of Oracle Java SE ‘Employee’ Licensing – Breaks down indirect costs like headcount growth, support renewals and audit risk under the employee model.
- Are You Facing Retroactive Licensing Fees for Java Usage? – Discusses Oracle’s practice of charging back‑dated fees and how to respond.
- Oracle Java Licensing Changes – 15 Things CIOs Need to Know – Highlights the major facts CIOs must grasp about the new licensing landscape.
- Oracle Java Licensing Changes Timeline – Chronological overview of Oracle’s key licensing changes from free use to employee‑based subscriptions.
- How to Optimize Your Java License Footprint and Cut Costs – Step‑by‑step guide to inventory, remove and consolidate Java installations for cost savings.
- OpenJDK vs Oracle JDK – Compares open‑source and Oracle distributions, licensing obligations and total cost of ownership.
- Employee‑Based Licensing Tiers for Oracle Java – Explains Oracle’s per‑employee pricing tiers with examples of annual costs for different organization sizes
- Java License Compliance Checklist
- Negotiating Oracle Java License Renewal or Exit Strategy
- Java Licensing Implications for Third-Party Software
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