Reducing Oracle Java Licensing Costs: A Practical Guide

Organizations worldwide face unexpected costs and compliance risks due to changes in Oracle’s Java licensing. Oracle’s Java Development Kit (JDK) now often requires paid subscriptions for production use, but the good news is that free alternatives exist. This advisory guide for Software Asset Management (SAM) managers and Oracle licensing professionals explains how to minimize or eliminate Oracle Java costs by understanding the rules and leveraging open-source Java options.

Oracle JDK vs. OpenJDK: The Cost of Free Java

Oracle JDK is Oracle’s official Java build that traditionally was free to use but now comes with licensing restrictions for commercial use. OpenJDK, on the other hand, is the Java open-source reference implementation. From Java 11, Oracle JDK and OpenJDK are nearly identical in code and performance​. The key differences lie in licensing and support, not in technical capabilities. An organization can run its Java applications on a free OpenJDK-based distribution without losing functionality, avoiding Oracle’s fees.

Why avoid Oracle JDK licensing costs? Oracle’s pricing and terms have shifted to maximize revenue. In 2023, Oracle moved to an employee-based subscription model requiring a license for every employee in the organization, regardless of how many use Java​. At a list price of about $15 per employee per month (with slight volume discounts)​ , even a mid-sized company with 500 employees could owe roughly $90,000 per year for Java​. This cost is often unwarranted when equally robust, free JDKs are available. Organizations can run Java in production without paying license fees while receiving timely updates by choosing OpenJDK distributions (from Eclipse Adoptium, Amazon, Azul, and others).

Understanding Oracle’s Java Licensing Rules

Oracle’s Java licensing can be confusing, but knowing which uses trigger a paid license is critical. Oracle offers its JDK under two main free-use licenses (with big limitations) and a commercial subscription:

• Oracle Technology Network (OTN) License: This is the license Oracle applied to Java 8 updates (post-2019) and Java 11 Oracle JDK downloads. The OTN license permits free use only for specific, non-production purposes – personal use, development, testing, prototyping, and demonstrations​. Any internal business or commercial production use under OTN requires a paid subscription. In other words, you can download Oracle JDK for free. Still, if you deploy it in a production environment (or any revenue-generating or operational context), you must purchase an Oracle Java SE subscription​​. Oracle enforces this aggressively via audits, so running Oracle JDK in production without a subscription poses compliance risks.
• Oracle No-Fee Terms and Conditions (NFTC): Introduced with Java 17 (September 2021), the NFTC license was a response to user demand for a “free Oracle JDK” for general use​. Under NFTC, certain Oracle JDK versions are temporarily free for all uses, including commercial production. Specifically, the latest Long-Term Support (LTS) release is no-fee until one year after the next LTS is released. For example, Oracle JDK 17 was free for production from 2021 until September 2024​. During this window, Oracle even provided security updates quarterly at no cost. However, NFTC is time-limited – once the free period ends for that Java version, any further updates or continued production use of that Oracle JDK requires purchasing a subscription or upgrading to a newer free version​. NFTC also does not allow redistribution of Oracle’s binaries or any Oracle support; it’s essentially “use at your own risk” beyond the free updates. Oracle’s strategy is to encourage companies to stay on the latest Java version for free, then convert to paid customers when the free term expires​.
• Oracle Java SE Subscription (Commercial License): For any scenario not permitted by OTN or beyond NFTC’s free period, Oracle requires a paid subscription. Historically, Oracle offered subscriptions per processor or named user. In January 2023, Oracle switched to a Universal Subscription model priced by total employees​. This means an organization must license Java for all employees (including part-time and contractors) if they want Oracle’s JDK support and updates legally in production. The subscription grants full production use rights and access to updates/support as long as you pay. But the cost can be prohibitive, and if you stop renewing, your rights to use new updates end. Oracle’s FAQ even suggests transitioning to OpenJDK binaries if you choose not to renew an Oracle subscription​.

Summary: Using Oracle’s JDK in production typically requires paying for a subscription unless you are within a no-fee (NFTC) window. Development, testing, and personal uses are free under Oracle’s terms, but anything beyond that crosses into paid territory. It’s crucial to track which Java versions and licenses you use – for instance, Oracle JDK 8 downloaded before 2019 was free under the old license. Still, the same Java 8 downloaded later is under OTN and not free for production use​. The table below provides a quick comparison of Oracle’s JDK vs. some popular free OpenJDK alternatives:

Oracle JDK vs OpenJDK Distributions – Comparison

Notes: GPL + CE refers to the GNU General Public License v2 with the Classpath Exception, the license for OpenJDK, which permits free use in any environment and linking without affecting proprietary code.

When You Must Pay for Java vs. When You Can Use It Free

Understanding a few common scenarios will clarify when a paid Oracle license is required:

• Using Oracle JDK 8 or 11 in Production: If your servers or desktops are running Oracle’s Java 8 (update 211 or later) or Oracle Java 11 JDK, and you are using them for internal business applications or services, you must have a subscription. These versions fall under the OTN license and are free for development/testing, but not for commercial or production deployment​. Example: A web application running on Oracle JDK 8 in a production Linux environment is not licensed for free use; you would need to pay Oracle or switch to an OpenJDK build.
• Sticking with Outdated Oracle JDK without Updates: Some organizations froze Oracle JDK at an old update to avoid new licensing terms. For instance, running Oracle JDK 8 update 202 (released before the 2019 cutoff) in production could be technically covered under the old free license. However, this approach means no security patches (since free public updates stopped in 2019 for Java 8)​, leading to security risks. Moreover, if you ever update or reinstall from Oracle’s site, you’d be accepting OTN terms. This scenario is not recommended – it’s safer to migrate to a free JDK that continues to get updates.
• Using Oracle JDK 17 during the NFTC period: Oracle JDK 17 LTS was free for all uses from its release in 2021 to September 2024 under NFTC​. If you deployed Java 17 in production during that window, you paid nothing and were compliant. However, once Oracle shifted Java 17 to OTN (after the free period), any updates beyond 17.0.11 or continued production use now require a subscription. To stay free, you would need to upgrade to Java 21 (the next LTS) or switch to an OpenJDK build for ongoing Java 17 updates.
• Using Oracle JDK 21 (current LTS) or later: Oracle JDK 21, released in 2023, is likely under NFTC for a few years. That means until one year after the next LTS (Java 25, expected in 2026) is out, you can use Oracle JDK 21 in production for free. Once that period ends, Oracle will again require a subscription for further updates. Plan: if you adopt Oracle JDK 21 for free now, be prepared to either update to Java 25 on release or transition to a different JDK by the end of the free term to avoid fees.
• Development, Testing, and Personal Use: All Oracle Java versions can be used in development environments, test labs, CI/CD pipelines, or by individual developers on personal machines without a paid license (under OTN or NFTC). The restriction kicks in when that code moves to production or commercial use. A good practice is to develop and test with an OpenJDK distribution in the first place, so there’s no risk of accidentally deploying Oracle’s JDK to production.
• Embedded Java or Redistribution: If your organization ships a product that includes Java (for example, bundling a Java runtime with an appliance or desktop application), Oracle’s free licenses do not cover that scenario. Distributing Oracle’s JRE/JDK to third parties requires a separate OEM agreement​. In such cases, switching to an open-source JDK (which can be redistributed freely) is highly advisable to avoid royalty agreements.
• Using OpenJDK Distributions: If you run your applications on Eclipse Temurin, Amazon Corretto, Azul Zulu, or any other OpenJDK-based build, you owe Oracle nothing. These are fully licensed under open-source terms for both development and production. For example, if you replace Oracle JDK 11 on your servers with Eclipse Temurin 11, you can continue receiving security updates and running your apps without Oracle involvement. Always ensure no Oracle-provided binaries remain on production systems when you make this switch (to be safe in audits). Generally, performing a clean installation of the OpenJDK distribution and uninstalling Oracle JDK are sufficient.

Viable Free Java Alternatives and Their Trade-offs

Several mature, enterprise-grade Java distributions are available for free. Here are three popular options and considerations for each:

• Eclipse Temurin (Adoptium): Temurin continues the AdoptOpenJDK project under the Eclipse Adoptium initiative. It provides TCK-tested (fully Java-compliant) builds for all major Java versions. Temurin is completely free and open source. It’s backed by a community and vendors like IBM, Red Hat, and Microsoft, which means updates for LTS releases are robust. Trade-off: community support (forums, GitHub) is available, and some vendors offer paid support contracts if needed (e.g., IBM offers support for its clients). Temurin does not include proprietary add-ons – it’s a straight OpenJDK build. It is ideal for organizations that want a drop-in replacement for Oracle JDK with no licensing fuss. Updates are released quarterly, usually synchronized with Oracle’s release schedule.
• Amazon Corretto: Corretto is Amazon Web Services’ free OpenJDK distribution. Amazon uses Corretto internally on thousands of production systems and provides it as a no-cost service to everyone​. Corretto is known for long-term support: Amazon has committed to supporting Java 8 and 11 for many years beyond Oracle (Java 8 updates until at least 2030 in the community, and Java 11 until 2032​). This extended timeline is valuable for organizations stuck on older versions. Corretto includes security fixes and performance enhancements and is regularly updated (at least quarterly). Trade-offs: Amazon does not offer dedicated support for Corretto users outside AWS, but the distribution is stable. If you run on AWS, using Corretto may integrate well (and AWS support might indirectly assist if you encounter issues on their platform). Otherwise, community forums and documentation are your support channel. Corretto is a strong choice for long-term, free Java in production.
• Azul Zulu: Zulu is a free build of OpenJDK provided by Azul Systems. Azul is a company focused on Java, and Zulu is one of the most widely used OpenJDK alternatives. Zulu offers a range of Java versions (including older ones like Java 6, 7, 8, 11, 17, etc.) for free, with regular security updates. One benefit is that Azul sometimes provides specialized packages (e.g., bundles that include JavaFX or versions tuned for certain hardware). Trade-off: The free Zulu builds come with community support only, but Azul offers optional paid support and even a premium JVM (Azul Platform Prime) for those who need top performance or assistance. The free Zulu binaries are tested and reliable; many large firms use Zulu to avoid Oracle fees. Azul’s business model sells support, but there is no obligation to purchase anything to use Zulu. Updates for LTS releases are prompt and often on par with Oracle’s schedule.

Other notable mentions include Red Hat Build of OpenJDK (free with a Red Hat Enterprise Linux subscription, and community builds available) and IBM Semeru (which offers OpenJ9 as an alternative JVM). However, the three above (Temurin, Corretto, Zulu) cover the needs of most organizations and have broad community trust.

Trade-off summary: You relinquish direct Oracle support and warranties when using free OpenJDK alternatives. In practice, many organizations find this acceptable given the significant cost savings. If enterprise support is needed, it can be obtained from third parties at a lower cost or bundled with other services (for example, OpenJDK support is included with some operating system subscriptions like Red Hat). The functionality and performance of OpenJDK builds are virtually identical to Oracle JDK, since they share the same code base. The main “risk” is ensuring you have a process to apply updates promptly when the community releases them, as you won’t get official reminders from Oracle. Fortunately, the OpenJDK community and vendors are active, and critical patches are published on a predictable quarterly cycle.

Real-World Shifts Away from Oracle Java

Many organizations have already navigated away from Oracle’s Java to control costs. Industry surveys indicate a strong migration trend: in one 2022 survey, 45% of companies reported they have migrated or are migrating from Oracle Java to alternate OpenJDK distributions, with cost (cited by 53% of respondents) as the top driver for the change​. This reflects a broad recognition that paying Oracle for Java SE is often unnecessary.

Concrete examples include companies like Netflix, Spotify, and other tech leaders publicly noting they use OpenJDK builds to run their services. Even large financial institutions and retailers have made the switch. For instance, one large retailer that standardized Java 17 took advantage of Amazon Corretto as Oracle’s free period ended, seamlessly transitioning their Java runtimes to Corretto and avoiding a six-figure Oracle subscription cost​. They continued to receive all necessary updates without disruption. Another case saw a major bank switching hundreds of applications from Oracle JDK 8 to Azul Zulu 8 when Oracle’s free updates ceased in 2019. This proactive move saved them from a costly true-up during an Oracle audit.

These cases underline a key point: switching Java providers is generally straightforward. Since all Java implementations must pass the same compatibility tests, moving from Oracle JDK to an OpenJDK build rarely requires code changes. Most migrations involve uninstalling Oracle JDK, installing the alternative, and running regression tests to verify everything works. This process has been smooth in nearly all reports because OpenJDK and Oracle JDK behave the same for standard Java applications. The biggest challenge organizations face is inventorying where Oracle JDK is in use (often it sneaks into build pipelines, older servers, or packaged software). Once that is known, a plan can be made to replace it.

Even Oracle’s guidance suggests using OpenJDK if you don’t want to pay. Oracle provides OpenJDK builds of Java (under GPL license) and acknowledges users can switch to those as a solution when ending subscriptions.

This means there is a completely legal, Oracle-sanctioned way to run Java free of charge—just do not use the “Oracle JDK” binary for production.

Recommendations: Reducing Java Licensing Costs

To wrap up, here is a set of actionable recommendations for SAM managers and licensing teams to minimize Oracle Java expenses:

• 1. Audit Your Java Usage: Immediately inventory all instances of Java in your organization. Identify where Oracle’s JDK/JRE is installed (on servers, VMs, desktops, build environments, embedded in applications). Determine the version and how it was obtained (Oracle download vs third-party). This will spotlight any installations that might fall under Oracle’s licensing scope.
• 2. Determine License Requirements: For each Oracle Java installation, assess if it’s being used in a way that requires a license. Is it production or commercial use? If it’s only used for development or testing, you might be in the clear (OTN allows that), but be cautious that those dev/test copies don’t accidentally end up in production. Prioritize instances where Oracle JDK is used to run business applications, as those almost certainly need to be licensed or removed to avoid compliance issues.
• 3. Plan to Replace Oracle JDK with OpenJDK: In environments where you identified Oracle JDK and don’t need Oracle-specific features (which is almost always the case), formulate a migration plan to a free Java distribution. Choose a stable alternative like Eclipse Temurin, Amazon Corretto, or Azul Zulu for each Java version you use. Test the alternative in a staging environment for each application to ensure compatibility (in most cases, it will work out of the box). Then schedule the switch in production. This may involve coordination with application owners and scheduling downtime for a Java update, similar to applying a patch.
• 4. Stay on Supported Versions: Ensure that you are on a supported Java version from your new provider after migrating. For example, if you have legacy Java 8 applications, you can use an OpenJDK 8 from a provider that still updates it (Adoptium, Azul, or Corretto). If you’re on a very old Java (like 7 or 6), consider upgrading the application to a newer Java if possible, or obtaining a specialized build (Azul, for instance, provides Java 6/7 support for a fee if needed). Avoid running end-of-life Java versions without updates, which trades licensing risk for security risk.
• 5. Evaluate Support Needs: Determine if your organization requires a support contract for Java. Many businesses run Java without vendor support, relying on in-house expertise and community resources. However, if you need an SLA to troubleshoot JVM issues, consider purchasing support from a third-party vendor (e.g., Red Hat, Azul, IBM) for your OpenJDK distribution. These offerings are typically more flexible and cheaper than Oracle’s blanket subscription, and you only pay for what you need (for example, support for a certain number of servers). If you run Java on Red Hat Enterprise Linux, remember that Red Hat includes OpenJDK support with the OS subscription at no extra cost, which you might already be entitled to.
• 6. Keep Developers Informed: Communicate with development and DevOps teams about the Java policy. Clearly, Oracle JDK should not be used for new projects without a compelling reason. Provide them easy access to approved OpenJDK binaries and container images. Update build pipelines and SDK installers to use the chosen OpenJDK distribution by default. This prevents the inadvertent introduction of Oracle JDK in future deployments.
• 7. Monitor Oracle’s Licensing Announcements: Oracle’s Java licensing landscape can continue to evolve (as seen with the NFTC introduction and the 2023 pricing change). Assign someone on your team to keep tabs on Oracle’s Java release and licensing news. For instance, note when the current LTS free period will end (e.g., watch for announcements around Java 21’s NFTC window in a couple of years). Being proactive will ensure you’re not surprised by an audit or a suddenly license-required update.
• 8. Only Pay Oracle as a Last Resort: In some rare cases, you may have an Oracle product or a scenario that forces the use of Oracle JDK. For example, certain Oracle enterprise software might bundle Java and require an Oracle JDK for support, or a specific commercial feature might be used (though most formerly “commercial features” like Flight Recorder are now free). If, after analysis, you find you must use Oracle JDK in production and cannot migrate, then budget for the subscription for that specific usage. Try to negotiate the scope – you might still reduce cost by isolating that usage to specific servers or users if Oracle permits (though under the new employee metric, this is difficult). In short, paying Oracle should be the exception, not the norm.

Organizations can significantly reduce or eliminate Oracle Java licensing costs by following these recommendations. Many have demonstrated that you can run a fully functional, secure Java environment using open-source JDKs and avoid the hefty price tag Oracle now places on Java SE with proper planning. The keys are awareness and action: know your Java usage, understand the licensing obligations, and take control of your Java deployments. In doing so, you transform Java from a potential compliance cost center into a free, open technology asset for your business.