Oracle Java Licensing Agreements

Oracle Java Licensing Agreements Summary

• BCL: Applies to older versions; general-purpose computing is free, but commercial use is restricted.
• OTN: Java 11/17; prohibits commercial use without a license, free for development/testing.
• NFTC: Java 17 and newer; free use until September 2024; license needed for updates after.

Oracle Java Licensing Agreements

Oracle Java licensing agreements are crucial for organizations to navigate to ensure compliance and make informed decisions regarding Java usage within their enterprise.

Companies must understand three primary Oracle Java licensing agreements: the Oracle Binary Code License Agreement (BCL), the Oracle Technology Network License Agreement (OTN), and the No-Fee Terms and Conditions (NFTC).

Each agreement presents different terms, use cases, and potential business challenges.

Oracle Binary Code License Agreement (BCL)

The Oracle Binary Code License Agreement (BCL) is one of the oldest licensing agreements for Oracle Java. It primarily applies to older versions of Java, including Java SE 8 and its associated patches.

Due to the nuanced terms of this agreement, many organizations have faced confusion and challenges.

Key Features of the BCL

• Applicability: The BCL applies to Java SE versions before Java 11, including the widely-used Java SE 8.
• General Purpose Computing: Under the BCL, organizations can use Java for “general purpose computing” without a commercial license. This includes using Java on desktops or laptops for productivity applications, development tools, and web browsers.
• Definition of General Purpose Computing: Oracle’s definition of general purpose computing refers to Java being used on devices such as desktops or laptops to run productivity software or development environments. However, this vague definition has often been a point of contention and confusion.
• Commercial Use Restrictions: Despite allowing Java for general purposes, the BCL restricts its use in commercial settings, such as:
  • Running third-party applications using Java SE.
  • Embedding Java SE within custom software or commercial products.
  • Using Java SE in data centers or server-side applications.
• Security Updates: The BCL agreement allows Oracle to provide public updates, including security patches, for a limited time after a new version is released. Once this period ends, organizations need a commercial license to access additional security updates.

Implications for Organizations

The BCL has significant implications, especially for organizations still relying on older Java versions:

• Compliance Risks: Companies may unknowingly be non-compliant if they use Java SE for purposes beyond general-purpose computing without obtaining a license.
• Security Concerns: The absence of public updates after the initial period leaves organizations at risk if they continue using outdated Java versions without proper licenses, leading to vulnerabilities.
• Audit Vulnerability: Oracle has been known to conduct compliance audits, and misinterpretations the BCL terms can lead to financial penalties and licensing costs.
• Migration Considerations: Companies using Java under the BCL may need to consider updating to newer Java versions or switching to alternative Java distributions to minimize licensing complexities.

Oracle Java OTN SE

The Oracle Java Technology Network License Agreement (OTN) significantly changes Oracle’s Java licensing strategy. It applies to Java 11 and Java 17, clearly distinguishing it from the BCL.

Key Features of the OTN

• Strict Commercial Use Prohibition: Unlike the BCL, the OTN explicitly prohibits all commercial use of Java without a paid license. This removes any ambiguity associated with general-purpose computing under the BCL.
• Development and Testing Use: The OTN allows free use of Java for development and testing purposes, but any production or commercial use requires a commercial license.
• Version Specificity: The OTN applies specifically to Java 11 and Java 17, both Long-Term Support (LTS) versions of Java.
• No Free Security Updates for Commercial Use: Oracle does not provide free security updates under the OTN. Companies must obtain a commercial license to continue receiving critical updates.

Implications for Organizations

The OTN agreement has several implications that affect businesses, particularly those using Java in development and production:

• Clear Licensing Requirements: The OTN removes the ambiguity in the BCL, making it clear that any production or commercial use of Java requires a license.
• Potential Cost Increases: Organizations using Java 11 or 17 under the assumption of free usage may face unexpected costs when they move to production without a proper license.
• Security Considerations: Since there are no free security updates for production use, organizations must either purchase a license or face potential security vulnerabilities.
• Distinction Between Development and Production: The OTN distinguishes between development/testing and production environments. Companies need to be diligent about licensing compliance when moving between these environments.

Oracle No-Fee Terms and Conditions (NFTC)

The No-Fee Terms and Conditions (NFTC), introduced in 2021, is Oracle’s latest approach to Java licensing and applies to Java 17 and newer versions.

It offers a more flexible model for organizations using Java commercially without immediate costs.

Key Features of the NFTC

• Free Commercial Use: The NFTC allows free commercial use of Java 17 and later versions, a significant departure from the OTN model.
• Time-Limited Free Updates: Under the NFTC, Oracle provides free updates and security patches for a limited time—specifically until September 2024 for Java 17.
• Subscription Requirement for Long-Term Support: After the free update period ends, companies must purchase a subscription to continue receiving security updates and support.
• Version-Specific Terms: The NFTC only applies to Java 17 and newer versions. Older versions of Java remain under previous agreements like the BCL or OTN.
• No Redistribution Rights: While the NFTC allows for free use, organizations cannot redistribute Java or include it in commercial products for distribution purposes.

Implications for Organizations

The NFTC agreement offers opportunities but also presents challenges that organizations must consider:

• Reduced Initial Costs: Java 17 and newer versions can be adopted without immediate licensing costs, reducing organizations’ short-term expenses.
• Future Licensing Considerations: Once the free update period ends in September 2024, companies need to plan for potential future costs. For continued support, a paid subscription will be needed.
• Version Upgrades: To benefit from the NFTC, organizations may need to upgrade their Java environments to Java 17 or later, which could involve significant migration efforts and testing.
• Security Strategy: As security updates become paid after the free period, companies need to establish a strategy for handling these updates by purchasing a subscription or seeking alternative Java distributions.

Oracle Java Licensing Changes in 2024

A notable change in 2024 impacts Java 17 licensing under the NFTC agreement. Organizations using Java 17 can use it freely until September 2024, but a different licensing agreement will apply starting with the October 2024 security patch.

• Transition to OTN License: Beginning in October 2024, organizations wishing to apply new security patches to Java 17 will need to license under the Oracle Technology Network (OTN) agreement. This means that to receive updates after the initial free period, companies must move from the NFTC to the OTN, which requires a paid commercial license.

Summary of Oracle Java Licensing Agreements

Understanding the differences between these licensing agreements—BCL, OTN, and NFTC—is key to navigating Oracle Java’s evolving landscape.

Each agreement offers different opportunities and challenges, depending on the versions of Java in use and the organization’s goals.

• BCL: Applicable to older Java versions. Allows general-purpose computing for free but restricts commercial uses without a license. Updates are free for a limited time only.
• OTN: Covers Java 11 and 17. Strictly prohibits all commercial use without a paid license but allows free development and testing. No free security updates are provided for production use.
• NFTC: Covers Java 17 and newer. Allows free commercial use with time-limited free updates. Requires a subscription for updates and support beyond September 2024. Organizations must transition to OTN for Java 17 security updates from October 2024 onwards.

Strategies for Oracle Java Licensing

Given the complexity of Oracle Java licensing, organizations must be proactive to ensure compliance and avoid unexpected costs. Here are some recommendations to navigate the current licensing landscape effectively:

1. Conduct a Licensing Audit: Perform a thorough audit of Java deployments to identify versions in use, how they are being used, and whether they comply with current agreements.
2. Understand Environment Needs: Distinguish between development/testing and production environments. Ensure that environments requiring a commercial license are properly covered to avoid compliance issues.
3. Plan for Future Updates: If using Java 17 under the NFTC, plan for the end of the free update period in September 2024. Consider budget allocations for purchasing a subscription or transitioning to other Java distributions.
4. Evaluate Alternatives: Open-source alternatives, such as OpenJDK, may provide a viable solution for avoiding Oracle’s licensing fees. Consider these options while considering the potential differences in support and functionality.
5. Engage Licensing Experts: The evolving licensing landscape can be complex. Engaging with legal or licensing experts can help organizations understand their obligations and navigate Oracle’s requirements effectively.

Oracle Java Licensing Agreements FAQ

What are Oracle Java licensing agreements?
Oracle Java licensing agreements dictate the terms of use for different versions of Java. They include the BCL, OTN, and NFTC, each covering specific versions and use cases.

What is the Oracle Binary Code License (BCL)?
The BCL applies to older versions of Java, such as Java SE 8. It allows free use for general-purpose computing but restricts commercial use without a license.

What does general-purpose computing mean under the BCL?
General-purpose computing involves using Java on desktops or laptops for productivity applications, development, or web browsing without needing a commercial license.

When is a commercial license needed under the BCL?
A commercial license is required if Java SE is used in scenarios such as running third-party applications, embedding in custom products, or using it in server environments.

What is the Oracle Technology Network (OTN) license?
The OTN license applies to Java 11 and Java 17. It allows free use for development and testing but requires a paid license for any commercial or production use.

What are the main differences between BCL and OTN?
The BCL allows general-purpose free use but requires a license for specific commercial activities. At the same time, OTN prohibits all commercial use without a license and limits free use to development and testing.

Can Java 11 be used for free under OTN?
Java 11 can be free under OTN for development and testing purposes only. A paid license is required for any commercial use, including production.

What is the Oracle No-Fee Terms and Conditions (NFTC) license?
The NFTC allows free use of Java 17 and newer versions for commercial purposes until September 2024, after which a subscription is required for security updates.

How does the NFTC license differ from OTN?
Unlike OTN, which prohibits free commercial use, NFTC allows free commercial use of Java 17 and newer until September 2024 but requires a subscription for security updates afterward.

Is there a cost associated with Java 17 under NFTC?
Java 17 is free for commercial purposes under NFTC until September 2024. After this date, organizations must pay for security updates through a subscription.

What changes are coming for Java 17 licensing in October 2024?
Starting in October 2024, any security patches applied to Java 17 will require licensing under the Oracle Technology Network (OTN) agreement, which involves a paid commercial license.

What is the best way to stay compliant with Oracle Java licensing?
To ensure compliance, conduct a detailed inventory of Java versions in use, identify whether they are used in development or production, and determine applicable licensing requirements based on usage.

What are the risks of non-compliance with Oracle Java licensing?
Non-compliance can lead to financial penalties, retroactive licensing costs, and potential legal actions, as Oracle conducts audits to ensure organizations are properly licensed.

Can open-source alternatives replace Oracle Java?
OpenJDK and other open-source Java implementations can be used as alternatives without Oracle’s licensing fees. However, organizations must evaluate support, compatibility, and security needs.

How can organizations manage Oracle Java licensing costs?
Consider transitioning to newer Java versions under NFTC, evaluate open-source options, and work with licensing experts to determine your use case’s most cost-effective licensing strategy.

What should companies do as the free update period for Java 17 ends?
Companies need to plan for future licensing by purchasing a Java 17 security updates subscription or exploring alternatives like OpenJDK to avoid ongoing Oracle costs.