Oracle Java License Costs

Oracle Java Licensing Costs Summary

• Pre-2023: $2.50/user (Desktop), $25/processor (Server).
• 2023 Model: Employee-based pricing starts at $15/employee per month.
• Pricing Tiers: Cost per employee decreases as the total count rises.

Oracle Java License Costs and Considerations

Oracle’s Java licensing structure has undergone significant changes over the years, with the most recent and impactful shift being introducing an employee-based pricing model in 2023.

Understanding these changes is essential for businesses using Java in various environments, such as VMware, to manage compliance and control costs.

This guide will explore the evolution of Oracle Java licensing, pricing models, key considerations, and strategies for managing licensing in complex IT environments.

Evolution of Oracle Java Licensing

Oracle’s approach to Java licensing has evolved considerably since acquiring Sun Microsystems in 2010.

Over the years, significant licensing changes occurred in 2019, 2021, and 2023, each reshaping how organizations manage Java licensing.

The 2019 Shift

In 2019, Oracle introduced significant changes to its Java SE licensing model that affected how organizations could use Java, particularly Java SE 8:

• Subscription Requirement for Updates: Oracle announced that updates to Java JDK 8 from patch 211 onwards would require a paid subscription. This change, effective in April 2020, forced many organizations to rethink their Java usage strategies and budget for ongoing costs.
• Introduction of the Java OTN SE Agreement: The new Oracle Technology Network (OTN) SE Agreement prohibited all commercial usage of Java without a proper license, creating significant challenges for organizations relying on Java SE for production purposes.
• Implications of the Binary Code License Agreement (BCLA): The BCLA, which applied to older Java versions, had already made most commercial Java users non-compliant without their knowledge. The changes in 2019 brought these issues into sharp focus, requiring organizations to reassess their compliance status.

The 2019 changes effectively ended the era of free long-term support for commercial users of Oracle Java, creating additional complexity for organizations that needed Java to run critical applications.

The 2021 NFTC Agreement

In 2021, Oracle introduced the No-Fee Terms and Conditions (NFTC) agreement, which offered some relief by applying to Java 17 and newer versions:

• Free Usage for Java 17: The NFTC allowed free commercial use of Java 17 and later versions, provided organizations adhered to the specific conditions in the agreement.
• Security Patches: Security patches for Java 17 released after September 2024 would require a paid subscription. This stipulation meant that while organizations could initially benefit from free use, they needed to prepare for costs associated with long-term security.
• Limited Scope: The NFTC did not apply to older Java versions (Java 1-16), meaning organizations using these versions had to comply with pre-existing licensing requirements.

The 2021 changes provided some flexibility for companies willing to upgrade to Java 17 or newer versions but also introduced new challenges related to long-term security support.

The 2023 Employee-Based Licensing Model

The most significant change in Oracle Java licensing came in January 2023 with the introduction of the Employee for Java SE Universal Subscription model:

• Enterprise-Wide Metric: Unlike previous licensing models, the 2023 model is based on an organization’s total number of employees rather than individual Java users or servers. The entire employee population must be licensed if one employee or server uses Java.
• All-Employee Licensing: If an organization requires Java for even a single user or server, they must purchase licenses for their entire workforce, which can lead to substantial cost increases.
• Pricing Tiers: The new employee-based pricing model introduced tiered pricing, depending on the number of employees in an organization. The cost per employee decreases as the total employee count increases.
• Discontinuation of Old Licensing Models: The Named User Plus and Processor licenses are no longer available for new purchases, forcing all organizations to adopt the new employee-based model.

These changes in 2023 have had far-reaching financial and operational implications for organizations, especially those with many employees but relatively few Java users.

Oracle Java Licensing Costs: Before and After 2023

Pre-2023 Licensing Options

Before the 2023 changes, Oracle offered two main licensing options for Java SE:

1. Java SE Desktop Subscription:
   • Cost: USD 2.50 per user per month.
   • Purpose: Designed for individual users who needed Java to run desktop applications.
2. Java SE Subscription:
   • Cost: USD 25 per month per Oracle processor.
   • Purpose: Used to license servers where Java was installed, typically for backend or server-side applications.

These options provided organizations with flexibility, allowing them to license Java only for those users or servers actively using the platform.

2023 Employee-Based Pricing Model

With the introduction of the Employee for Java SE Universal Subscription in 2023, pricing is determined by the total number of employees within an organization. The new pricing tiers are as follows:

• 1-999 Employees: $15.00 per employee per month
• 1,000-2,999 Employees: $12.00 per employee per month
• 3,000-9,999 Employees: $10.50 per employee per month
• 10,000-19,999 Employees: $8.25 per employee per month
• 20,000-29,999 Employees: $6.75 per employee per month
• 30,000-39,999 Employees: $5.70 per employee per month
• 40,000-49,999 Employees: $5.25 per employee per month

This employee-based model can result in significantly higher costs for organizations with a large workforce, even if only a small percentage of employees actively use Java.

Key Considerations for Oracle Java Licensing

To effectively navigate Oracle Java licensing, organizations need to consider several factors:

1. Understanding Licensing Agreements

Oracle has three main Java licensing agreements that organizations must be familiar with:

• Oracle Binary Code License Agreement (BCL): This agreement applies to older versions and patches of Java. It allows free use for “general purpose computing” but requires a license for commercial applications beyond this scope.
• Oracle Technology Network License Agreement (OTN): The OTN applies to Java 11 and 17 and prohibits all commercial use of Java without a paid license.
• Oracle No-Fee Terms and Conditions (NFTC): The NFTC allows free commercial usage of Java 17 and newer versions, with a subscription required for security patches after September 2024.

2. Determining License Requirements

Oracle’s licensing model is complex, making it challenging for organizations to determine their specific licensing needs. Key considerations include:

• Java Version: Different versions of Java are subject to different licensing requirements.
• Usage Scenario: Java can be used for free general-purpose computing under the BCL, but commercial uses require a license.
• Security Patches: Applying security patches, particularly for older versions of Java, often requires a commercial license.
• Employee Count: The 2023 model bases licensing requirements on total employees, not just active Java users.

3. Java in VMware Environments

Using Java in VMware environments introduces additional licensing complexities. Key points to keep in mind include:

• Partitioning Policy: Oracle does not recognize VMware’s soft partitioning as a valid means of limiting licensing scope. This means all physical cores in a VMware cluster may need to be licensed, regardless of Java usage.
• vMotion Implications: If Java is installed on VMs that can migrate across hosts via vMotion, all hosts in the cluster may need to be licensed.
• Processor Definition: Oracle’s definition of a processor for licensing purposes may differ from the physical CPU count, especially in virtualized environments.
• Hard Partitioning: To minimize licensing costs, consider using Oracle-approved hard partitioning solutions, which can help limit the number of processors that need to be licensed.

4. Oracle Java Audits

Oracle has become increasingly proactive in enforcing Java licensing compliance. The company conducts two types of audits:

• Soft Audits: These begin with Oracle contacting organizations for informal compliance discussions, often through emails requesting a meeting.
• Formal Audits: In formal audits, Oracle’s audit organization conducts a comprehensive review of all Java deployments, including production, testing, and development environments.

Organizations must maintain detailed records of their Java deployments to avoid penalties and backdated costs and comply with Oracle’s licensing requirements.

Conclusion

Oracle Java licensing has evolved into a complex structure that requires organizations to be vigilant in managing compliance and controlling costs.

From the 2019 introduction of subscription requirements for Java SE 8 to the 2023 shift to employee-based licensing, businesses must carefully assess their Java usage and explore strategies to minimize financial impact.

Oracle Java License Costs FAQ

What are the costs of Oracle Java licenses before 2023?
Before 2023, Oracle offered two main options: Java SE Desktop Subscription at $2.50 per user per month and Java SE Subscription for servers at $25 per Oracle processor per month.

What is the employee-based licensing model introduced in 2023?
In 2023, Oracle introduced an employee-based model where costs are determined by the number of employees in an organization, regardless of who uses Java.

How is the 2023 employee-based pricing structured?
The 2023 pricing model follows a tiered structure:

• 1-999 employees: $15 per employee per month.
• Rates decrease as employee numbers increase.

How do the old and new pricing models differ?
The pre-2023 model allowed organizations to license specific users or servers, while the 2023 model requires licenses for the entire employee base, increasing costs for companies with large workforces.

Are there any discounts for larger organizations?
Yes, the employee-based pricing model offers reduced rates per employee as the total employee count increases, making it somewhat more affordable for larger enterprises.

Do we need to license all employees even if not all use Java?
Yes, under the 2023 model, the entire workforce must be licensed, regardless of individual Java usage, if one person or server uses Java.

What happened to the Named User Plus and Processor licenses?
The Named User Plus and Processor licenses were discontinued in 2023. Organizations must now use the employee-based model for all new licenses.

What is the cost impact for smaller organizations?
Smaller organizations with fewer employees may face higher per-employee costs than larger enterprises, with a minimum rate of $15 per employee per month.

Can Java still be used for free under any conditions?
Java 17 and newer versions can be used under the No-Fee Terms and Conditions (NFTC) until September 2024. After that, security updates will require a paid subscription.

Are there any alternatives to Oracle’s Java licensing?
Yes, alternatives such as OpenJDK, AdoptOpenJDK, Amazon Corretto, and Azul Zulu are available. They do not require Oracle’s licensing fees and may have different support options.

How do I determine my licensing requirements?
First, identify the versions of Java used and how they are being used (development vs. production). Then, the total employee count is determined to understand which tier applies. Please note that some Oracle software products include a Java SE license.

What are the key considerations for licensing Java in VMware environments?
Oracle’s partitioning policy does not recognize VMware soft partitioning, meaning all physical cores in a cluster may need licensing if Java is installed on VMs that can migrate across nodes.

Do we need to pay for security patches after September 2024?
Yes, for Java 17 and newer versions, after the free update period ends in September 2024, organizations must pay for continued security patches and support.

How can companies reduce the cost of Oracle Java licenses?
Consider adopting open-source alternatives, upgrading to newer versions to take advantage of the NFTC, or reducing Java usage to manage costs effectively.

Are there any strategies for managing Oracle Java licensing costs in complex environments?
Conduct a thorough inventory, consider using hard partitioning in VMware environments, educate your development teams, and engage with Oracle or third-party support providers to optimize licensing needs.