Oracle Java Licensing Changes

Oracle Java Licensing Changes Summary:

• 2019: Java SE 8 updates require a subscription, and OTN SE limits use.
• 2021: NFTC allows free use of Java 17; conditions apply.
• 2023: Employee-based model replaces previous licensing.
• Pricing is now based on the total employee count.

Overview of Oracle Java Licensing Changes

Oracle Java licensing has experienced significant shifts over the past few years. These changes have had far-reaching implications for organizations relying on Java for their software development and IT infrastructure.

To fully understand the current licensing model, it’s essential to examine the major changes Oracle has implemented recently, specifically in 2019, 2021, and 2023.

Java Licensing Changes 2019: End of Free Long-Term Support

The 2019 changes marked a pivotal shift in Oracle’s approach to Java licensing, particularly for Java SE 8, which organizations widely use globally.

Before this change, Java updates and patches were generally free, including those used in commercial environments.

However, Oracle made a significant policy change with Java SE 8, beginning with patch 211.

• Subscription Requirement for Updates: Oracle announced that from patch 211 onwards, updates for Java JDK 8 would require a paid subscription. This change was fully effective starting in April 2020, forcing many organizations to reassess their use of Java and the associated costs. Companies that had previously relied on free updates for security and performance improvements were now faced with the need to pay for continued support.
• Introduction of the Java OTN SE Agreement: Another important aspect of the 2019 changes was the introduction of the Java OTN (Oracle Technology Network) SE Agreement. This agreement prohibited all commercial usage of Java without a proper license, essentially removing the option for organizations to use Java SE for free in production environments. This shift significantly impacted how businesses could utilize Java, particularly for mission-critical applications.
• Implications for the Binary Code License Agreement (BCLA): Before the 2019 changes, many organizations used Java under the Binary Code License Agreement (BCLA), which allowed certain free commercial uses. However, the introduction of the OTN SE Agreement meant that many companies suddenly found themselves non-compliant, as the new licensing requirements extended to all commercial uses beyond general-purpose computing.

These changes were designed to shift Java from a freely available technology to a subscription-based model, which made it crucial for organizations to better understand their Java usage and licensing obligations.

Java Licensing Changes 2021: Introduction of the NFTC Agreement

In 2021, Oracle introduced the No-Fee Terms and Conditions (NFTC) agreement, aimed at providing more flexibility for businesses wanting to use Java for commercial purposes. This change came with some notable stipulations:

• Java 17 Available for Free Under NFTC: Under the NFTC agreement, Java 17 and later versions could be used for free for commercial purposes under certain conditions. This was a welcome relief for many organizations that hesitated to pay for Java subscriptions. The NFTC provided a way for companies to use newer versions of Java without incurring additional licensing costs, but only until certain limitations were reached.
• Limited to Java 17 and Later: One important caveat of the NFTC agreement was that it did not apply to older versions of Java, specifically Java 1 to Java 16. Organizations still using these older versions had to comply with the previous licensing requirements, which included obtaining a paid subscription or facing potential non-compliance.
• Security Patch Limitations: While Java 17 could be used for free, security patches released after September 2024 required a paid subscription. This incentivized organizations to stay current with their Java versions while making them aware of future costs if they wanted to continue receiving updates and security fixes.

The introduction of the NFTC agreement offered a middle ground for companies looking to stay up-to-date with the latest Java versions without the immediate need for a paid license. However, it also introduced some complexities for organizations that needed to balance security needs with licensing budgets.

Java Licensing Changes 2023: The Employee-Based Licensing Model

The most recent major change to Oracle Java licensing was the introduction of the Employee for Java SE Universal Subscription model in 2023.

This change represents a significant departure from the previous Named User Plus and Processor-based licensing metrics, fundamentally altering how organizations think about Java licensing.

• Employee-Based Licensing: The new model is based on an enterprise-wide metric that considers the total number of employees within the organization rather than focusing on individual users or processors. This means that even if Java is used by only a handful of employees or servers, the licensing requirement applies to the entire workforce. For instance, if a company has 500 employees but only 20 use Java, the license cost is calculated based on all 500 employees. This change can significantly increase costs for organizations, especially those with large employee counts but relatively low Java usage.
• Pricing Tiers Based on Employee Count: Oracle introduced a tiered pricing model to reflect the number of employees within an organization. The pricing structure decreases on a per-employee basis as the total number of employees increases. This approach incentivizes larger enterprises by providing slightly reduced costs per employee, but the overall expense can still be substantial. The 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
• Removal of Previous Licensing Models: The Named User Plus and Processor licenses are no longer available for new purchases, meaning all new licensing must conform to the employee-based model. This change effectively removes some organizations’ flexibility in licensing individual users or specific servers, leading to a more uniform approach.
• Terms of Use Remain the Same: While the pricing metric has changed, Java’s actual terms of use remain largely the same. This means that the functionality and usage rights provided by the license have not been altered—only how the costs are calculated and how licenses are applied within organizations.

Implications for Businesses

The changes to Oracle’s Java licensing model have important implications for businesses of all sizes, from small startups to large multinational enterprises. Here are some key impacts:

1. Cost Considerations: For many organizations, moving to an employee-based licensing model has increased costs. Even companies with minimal Java usage now need to consider the full cost of licensing their entire workforce, which can be a significant expense.
2. Shift Towards Open-Source Alternatives: The increased costs associated with Oracle’s licensing changes have prompted some organizations to explore open-source alternatives like OpenJDK. These alternatives can provide similar functionality without the high licensing costs, though they may lack the same support and guarantees as Oracle’s versions.
3. Compliance Challenges: Oracle’s introduction of more aggressive audit practices means that organizations must be diligent in maintaining compliance with Java licensing requirements. The shift from per-user licensing to employee-based licensing can complicate compliance efforts, as organizations need to maintain accurate employee counts and ensure that their licensing remains current.
4. Impact on IT Strategy: Organizations are now forced to reconsider their IT strategies, particularly software deployment. With the costs of licensing Java increasing, some companies are limiting Java use to only essential applications, while others are accelerating plans to migrate to alternative platforms that do not require Oracle licensing.

Java Licensing Changes 2024: Security Patch Licensing for Java 17

In 2024, a significant change was introduced that impacts organizations using Java 17 under the NFTC agreement. While Java 17 is licensed under NFTC and can be used freely under certain conditions, any security patch released in October 2024 and onwards will require organizations to license Java under the Oracle Technology Network (OTN) agreement.

This means that if companies want to continue receiving critical security updates for Java 17 beyond September 2024, they must transition to a paid OTN license. This change adds a new dimension to the licensing considerations for organizations relying on Java 17, as they must decide whether to adopt a paid license for continued security or explore alternative solutions.

Implications for Businesses

The changes to Oracle’s Java licensing model have important implications for businesses of all sizes, from small startups to large multinational enterprises. Here are some key impacts:

1. Cost Considerations: For many organizations, moving to an employee-based licensing model has increased costs. Even companies with minimal Java usage now need to consider the full cost of licensing their entire workforce, which can be a significant expense.
2. Shift Towards Open-Source Alternatives: The increased costs associated with Oracle’s licensing changes have prompted some organizations to explore open-source alternatives like OpenJDK. These alternatives can provide similar functionality without the high licensing costs, though they may lack the same support and guarantees as Oracle’s versions.
3. Compliance Challenges: Oracle’s introduction of more aggressive audit practices means that organizations must be diligent in maintaining compliance with Java licensing requirements. The shift from per-user licensing to employee-based licensing can complicate compliance efforts, as organizations need to maintain accurate employee counts and ensure that their licensing remains current.
4. Impact on IT Strategy: Organizations are now forced to reconsider their IT strategies, particularly software deployment. With the costs of licensing Java increasing, some companies are limiting Java use to only essential applications, while others are accelerating plans to migrate to alternative platforms that do not require Oracle licensing.

Navigating Oracle Java Licensing Changes

Given the complexity of Oracle’s Java licensing changes, organizations must take proactive steps to navigate this landscape effectively. Here are some recommendations for managing these changes:

• Conduct a Full Java Inventory: Organizations should conduct a comprehensive inventory of all Java deployments, including the versions in use and the specific environments (e.g., development, testing, production). This will help identify licensing needs and avoid non-compliance.
• Evaluate Licensing Options: Depending on how Java is used within the organization, evaluating alternative licensing options or even migrating to open-source Java implementations like OpenJDK may make sense. This is especially relevant for organizations seeking to reduce costs or avoid employee-wide licensing requirements.
• Monitor Employee Count and Usage: Under the new employee-based model, maintaining an accurate count of employees is crucial for determining licensing needs. This count includes full-time employees, part-time staff, contractors, and consultants. Accurate records can help avoid costly discrepancies during Oracle audits.
• Plan for Future Updates: Organizations should also be mindful of Oracle’s plans for future updates and the implications of using newer versions under the NFTC agreement. For example, while Java 17 can be free under certain conditions, security patches require a paid subscription after September 2024.
• Consult Licensing Experts: Given the intricacies of Oracle’s Java licensing changes, consulting with licensing experts or legal professionals can help ensure compliance and provide guidance on managing licensing costs and obligations.

Oracle Java Licensing Changes FAQ:

What major changes occurred in Oracle Java licensing in 2019?
In 2019, Oracle required subscriptions for Java SE 8 updates beyond patch 211 and introduced the Oracle Technology Network (OTN) SE agreement, which prohibited free commercial use.

What is the Oracle Technology Network (OTN) SE Agreement?
The OTN SE Agreement restricts free commercial usage of Java, requiring licenses for commercial use starting from 2019, especially for Java SE 8 and its updates.

How did Oracle Java licensing change in 2021?
Oracle introduced the No-Fee Terms and Conditions (NFTC) agreement in 2021, allowing free commercial use of Java 17 and newer versions under certain conditions.

Does the NFTC agreement cover all Java versions?
No, the NFTC agreement only applies to Java 17 and later versions. Versions from Java 1 to Java 16 are not included and require a license for commercial use.

What licensing changes happened in 2023?
In 2023, Oracle replaced the Named User Plus and Processor licenses with the Employee for Java SE Universal Subscription model, requiring licenses for all employees.

How are Oracle Java licenses priced in 2023?
Licensing costs are now based on the total number of employees. Pricing ranges from $15 per employee per month for smaller organizations to lower rates for larger ones.

What is the Employee for Java SE Universal Subscription?
This 2023 model bases licensing on the number of employees rather than individual users or servers, requiring a company-wide license if Java is used anywhere.

Can I still use older Oracle Java versions for free?
No, older versions like Java SE 8 require a license for updates beyond certain patches, especially for commercial purposes. Free use has specific restrictions.

What are the cost implications of the 2023 changes?
The employee-based model often increases licensing costs, particularly for large companies, as licensing now applies to the entire workforce regardless of Java use.

Are there alternatives to Oracle Java for avoiding licensing fees?
Yes, OpenJDK and other open-source versions are viable alternatives that do not require Oracle’s licensing but may lack enterprise-level support.

What is Oracle’s soft audit approach for Java licensing?
Oracle often emails organizations to inquire about their Java compliance. These informal audits help Oracle identify unlicensed usage and ensure compliance.

How can I comply with Oracle’s Java licensing changes?
Conduct a thorough inventory of Java installations, understand which versions are used, and ensure that employee counts align with the new licensing requirements.

What is the impact of security patches on licensing?
Applying security patches, especially on older Java versions, can trigger the need for a paid license. The NFTC also requires subscriptions for patches after September 2024.

Is Java 17 free to use indefinitely?
Java 17 is free for commercial use under the NFTC, but long-term security updates after September 2024 require a subscription for continued support.

How do the recent changes affect small businesses?
Small businesses must also comply with employee-based licensing if they use Java. Even a single Java installation may require licensing for all employees.