Oracle Java Licensing Explained

Oracle Java Licensing Explained Summary

• 2019: Subscription required for Java JDK 8 updates.
• 2021: NFTC introduced for Java 17; free with some limits.
• 2023: Employee-based licensing model introduced.
• Agreements: BCL, OTN, and NFTC govern different Java versions.

Oracle Java Licensing Explained

Oracle’s Java licensing model has undergone significant changes over the years, creating a complex landscape for organizations to navigate.

This article aims to provide a comprehensive explanation of Oracle Java licensing, covering key aspects, recent changes, and important considerations for businesses.

Evolution of Oracle Java Licensing

Oracle’s approach to Java licensing has evolved considerably since its 2010 acquisition of Sun Microsystems. The most impactful changes occurred in 2019, 2021, and 2023, each reshaping how organizations must approach Java licensing.

The 2019 Shift

In 2019, Oracle introduced major changes to its Java SE licensing model, marking a significant departure from previous practices:

• Subscription Requirement for Updates: Oracle announced that updates to Java JDK 8 from patch 211 onwards would require a paid subscription. This change, effective from April 2020, forced many organizations to budget for ongoing Java support costs.
• Introduction of the Java OTN SE Agreement: The Oracle Technology Network (OTN) SE Agreement prohibited all commercial usage of Java without a valid license.
• Implications of the Existing Binary Code License Agreement (BCLA): The Binary Code License Agreement (BCLA), which governed older versions of Java, already made many commercial users non-compliant without their awareness. The changes in 2019 highlighted these non-compliance risks, prompting organizations to reevaluate their Java use.

The 2019 changes effectively ended the era of free long-term support for commercial Java SE users, introducing more stringent requirements for ongoing compliance.

The 2021 No-Fee Terms and Conditions (NFTC) Agreement

In 2021, Oracle introduced the No-Fee Terms and Conditions (NFTC) agreement, offering new licensing terms for Java 17 and later versions:

• Free Usage for Java 17: Under the NFTC, Java 17 and newer versions were made available for free commercial use, providing some relief for organizations that chose to upgrade.
• Security Patches Requirement: However, security patches for Java 17 released after September 2024 would require a paid subscription, introducing long-term costs that organizations must prepare for.
• Limited Scope: The NFTC did not affect licensing terms for Java versions 1-16, meaning older versions continued to require paid licenses.

The 2021 changes allowed organizations to benefit from free usage of newer Java versions but required careful planning for continued support and updates beyond September 2024.

The 2023 Employee-Based Licensing Model

In January 2023, Oracle introduced the Employee for Java SE Universal Subscription model, representing a significant shift in how Java SE is licensed:

• Enterprise-Wide Metric: The new model is based on an organization’s total number of employees, not just the number of Java users or servers. The entire employee population must be licensed if one employee or server uses Java.
• All-Employee Licensing: The organization must purchase licenses for the entire workforce if a single user or server uses Java.
• Pricing Tiers: The new model introduced tiered pricing based on the number of employees, with per-employee costs decreasing as the total number of employees increased.
• Discontinuation of Old Licensing Options: The Named User Plus and Processor licenses were discontinued, forcing organizations to adopt the new employee-based model for all new purchases.

These changes have had far-reaching financial implications for organizations, especially those with a large workforce but relatively few Java users.

Oracle Java Licensing Agreements

Oracle has three main Java licensing agreements that organizations must consider:

1. Oracle Binary Code License Agreement (BCL)
   • Applicability: Applies to older versions and patches of Oracle Java.
   • General Purpose Computing: Allows free use for “general purpose computing.”
   • Commercial Usage: Requires a license for usage beyond general-purpose computing.
2. Oracle Technology Network License Agreement (OTN)
   • Applicability: Applies to Java 11 and Java 17.
   • Commercial Restrictions: Prohibits all commercial use of Java without a paid license.
3. Oracle No-Fee Terms and Conditions (NFTC)
   • Introduction: Introduced in 2021 for Java 17 and newer versions.
   • Usage: Allows free commercial usage with some restrictions.
   • Subscription for Security Patches: A paid subscription is required for security patches after September 2024.

Oracle Java Licensing Requirements by Version

Understanding the licensing requirements for different Java versions is crucial for maintaining compliance:

• Oracle Java JDK Versions 1-8 (Pre-211 Security Updates)
  • Generally requires a Java SE license due to the broad scope of the BCLA.
  • Commercial Features require separate licenses from Oracle.
• Oracle Java JDK Versions 1-8 (Applying Security Patch 211 and Later)
  • Must be licensed under the Java OTN SE Agreement.
  • Exception: Licensing is not required if Java is used solely for products listed in Schedule B.
• Oracle Java JDK Versions 11-16
  • Licensing Requirement: Must license Oracle JDK for both clients and servers, with no free usage allowed.
  • Exception: Licensing is not required if Java is used solely for products listed in Schedule B.
• Oracle Java JDK Version 17 and Later
  • Initially available under the NFTC, allowing free commercial use.
  • With the release of Java 21, free commercial use for Java 17 ended.
  • Versions beyond Java 17.0.12 require a paid subscription for usage.

Oracle Java Licensing Costs

With the introduction of the Employee for Java SE Universal Subscription model in 2023, Oracle’s pricing now follows a tiered structure based on the number of employees within an organization:

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

This new pricing model can lead to significantly higher costs for many organizations, particularly those with many employees but relatively few Java users. Companies must carefully assess their employee count, and Java needs to understand the potential financial impact.

Determining License Requirements

Given the complexity of Oracle’s Java licensing model, organizations often struggle to determine whether they need a license. Key considerations include:

• Java Version: Different versions of Java are subject to different licensing terms. Understanding which version is in use is critical for determining licensing requirements.
• Usage Scenario: The BCL agreement allows free use for “general purpose computing,” but many organizations find that their actual use cases fall outside this definition, necessitating a license.
• Commercial Features: Java commercial features have always required a separate license. Organizations must assess whether they use any of these features in their deployments.
• Security Patches: Certain security patches, particularly for older Java versions, can trigger the need for a license. Organizations must track which patches have been applied and whether they fall under specific licensing requirements.
• Employee Count: Under the new 2023 employee-based model, an organization’s total number of employees determines licensing requirements, not just the number of Java users. Even organizations with limited Java users may need to purchase enterprise-wide licenses.

Oracle Java Licensing Explained FAQ

What is Oracle Java Licensing?
Oracle Java licensing determines how organizations can use different versions of Java SE, including updates, support, and commercial usage. It involves agreements such as BCL, OTN, and NFTC.

What changed in Oracle Java licensing in 2019?
In 2019, Oracle announced that Java JDK 8 updates from patch 211 onwards would require a paid subscription, ending free support for commercial users.

What is the OTN SE Agreement?
The Oracle Technology Network (OTN) SE Agreement prohibits all commercial usage of Java without a valid license. It primarily applies to Java 11 and Java 17.

What is the No-Fee Terms and Conditions (NFTC) agreement?
Introduced in 2021, the NFTC allows free commercial usage of Java 17 and newer versions but requires a subscription for security patches after September 2024.

How does the 2023 licensing model work?
In 2023, Oracle introduced an employee-based licensing model, requiring organizations to license Java for their entire employee population if Java is used by even one user or server.

What is the Binary Code License Agreement (BCL)?
The BCL applies to older versions of Java SE and allows free use for “general purpose computing” but requires a license for any commercial use beyond this scope.

Do all Java versions require licensing?
Yes, but licensing requirements vary by version. Java 17 and newer versions can be used for free initially, but security patches beyond September 2024 require a subscription.

What are the costs of Oracle Java licensing in 2023?
The 2023 model follows a tiered pricing structure based on the number of employees, starting at $15 per employee per month for 1-999 employees.

How does employee-based licensing affect costs?
The new model can lead to higher costs, especially for large organizations, as it requires licensing the entire workforce, not just individual Java users.

What are the three main Oracle Java licensing agreements?
The BCL for older versions, OTN for Java 11/17, and NFTC for Java 17 and newer versions define licensing requirements for different Java versions.

Are there exceptions to Java licensing requirements?
Certain products listed in Schedule B are exceptions, and Java may not require additional licensing when used solely within those environments.

What are Java commercial features, and do they need a license?
Java commercial features include advanced tools not available in general-purpose Java usage. These always require a separate license from Oracle.

How do security patches affect Java licensing?
Applying certain security patches, especially for older Java versions, requires a commercial license. Java 17 patches beyond September 2024 require a subscription.

How does Oracle handle Java licensing audits?
Oracle conducts soft audits (compliance discussions) and formal audits (detailed deployment reviews). Organizations must be prepared with accurate records of Java usage.

What are some strategies for managing Oracle Java licensing?
To manage licensing, conduct regular audits, educate stakeholders on licensing terms, plan version upgrades, consider alternative Java distributions, and maintain proper documentation.

What happens if we don’t comply with Oracle Java licensing?
Non-compliance with Oracle’s Java licensing can lead to financial penalties, retroactive licensing costs, and legal repercussions. It is crucial to remain proactive in managing compliance.