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Data Directions: The Java Tsunami

Oracle acquired Sun Microsystems in 2009, obtaining the Java programming language. It took Oracle a decade to realize Java's monetization potential. In 2023, Oracle introduced a new employee-based licensing model for Java, requiring organizations to pay licensing fees based on total employee headcount rather than actual Java usage. This represented a significant price increase for most companies and led Oracle to seek out unlicensed users of Java. While Oracle has a right to payment for its software, the new subscription model does not necessarily reflect the value Java brings to each organization.

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21 views4 pages

Data Directions: The Java Tsunami

Oracle acquired Sun Microsystems in 2009, obtaining the Java programming language. It took Oracle a decade to realize Java's monetization potential. In 2023, Oracle introduced a new employee-based licensing model for Java, requiring organizations to pay licensing fees based on total employee headcount rather than actual Java usage. This represented a significant price increase for most companies and led Oracle to seek out unlicensed users of Java. While Oracle has a right to payment for its software, the new subscription model does not necessarily reflect the value Java brings to each organization.

Uploaded by

andersonescorza
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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DATA DIRECTIONS

The Java Tsunami


On April 20, 2009, Oracle announced that it had entered into
an agreement to acquire Sun Microsystems. With the purchase With the purchase of Sun, Oracle
of Sun, Oracle entered the hardware business and obtained the entered the hardware business and
Java programming language. It took a decade for Oracle to real-
ize the monetizing potential of Java.
obtained the Java programming language.
At the time, Oracle was—and remains to this day—the world’s It took a decade for Oracle to realize
leading producer of enterprise relational database software or the monetizing potential of Java.
(RDBMS). When executives at Oracle realized that a large per-
centage of the world’s enterprise applications used Java some-
where in the software stack, they recognized that they possessed
intellectual property that was both ubiquitous and lucrative. It
was the perfect answer to recoup the dwindling funds lost
to a business world that was coming to realize that the greatest
RDBMS ever produced might be both overpriced and unneces-
sary, and, more importantly, that there were alternatives to the
almighty Oracle RDBMS. To Oracle, Java constituted a bailout
the company couldn’t get from any bank or government because
Oracle owned it.
In early 2017, Oracle announced that it would begin charging
commercial users of Enterprise Java for updates/patches released
on or after April 16, 2019. Although open source Java remained
free, most software companies still built their applications using
the more sophisticated version of Java, which meant they needed
contracted support of that software from Oracle.
To be software-compliant moving forward, companies had
three options. First, they could continue to use versions of
Java that were predated April 16, 2019, but only a few security
teams would be happy. The second option was to remove Oracle
Java from their various environments. The third option, albeit
unpalatable, was to purchase a Java subscription from Oracle.
An Oracle customer purchasing a Java subscription at this
time had two choices. Purchase a desktop subscription for $30 a

Michael Corey, D.B.A., is co-founder of License year or a server subscription for $300 per processor, per annum.
Fortress (www.licensefortress.com). He was If the customer made a large purchase, typical volume purchase
recognized in 2015 and 2017 as one of the Top 100 discounts were expected.
people who influence the cloud, and is an Oracle
Ace, VMware vExpert, a former Microsoft Data FURTHER COMPLICATING THE MATTER
Platform MVP, and a past president of the IOUG. Check out
As previously mentioned, many commercial applications use
his blog at http://michaelcorey.com.
Oracle Java embedded in them. During the installation of these
Don Sullivan has been with VMware (www. commercial applications, it was common practice to instruct
vmware.com) since 2010 and is the product line
marketing manager for Business Critical Appli- the installer to install Oracle Java, then install the application.
cations and Databases with the Cloud Platform Many customers, unaware of the implications of that sequence
Business Unit. of events, shifted the burden of the Oracle Java license from the
application vendor to the end customer.

D BTA.COM/ BIG DATA QUARTERLY 27


DATA DIRECTIONS

EFFORT BEARS LITTLE FRUIT


Although companies were usually aware that they needed to
pay for commercial use of Java, common practice dictated that
the companies would wait for Oracle to approach them about
this new licensing requirement. This was not the best approach
to an ever-worsening problem.
As history would indicate, Oracle is very good at tracking the
use of valuable software, even years after that usage had begun.
Oracle leveraged the information it gathered when a customer
downloaded Java and targeted companies, vendors, and end users
at the top of this list.
Oracle utilized an old software licensing collection approach
and introduced the Java software license compliance audit. As
Oracle learned the hard way, this was a challenging undertaking,
given the ability for Java to exist anywhere and everywhere inside
an organization’s virtual walls. A Java software compliance audit
was labor-intensive and, to be thorough, required searching com-
prehensively. Oracle’s objective to monetize Java was not working
as planned, at least not at first.

JAVA TSUNAMI HITS WORLD COASTS


On Jan. 23, 2023, everything changed. Having figured out how
to license Java in a manner that would optimize profitability,
Oracle decided to move away from its traditional pricing model
to an employee-based licensing model.
Next, Oracle constructed a broad definition of what consti-
tutes an employee: “Employee for Java SE Universal Subscrip-
tion: is defined as (i) all of your full-time, part-time, temporary
employees, and (ii) all of the full-time employees, part-time The amazing aspect of this approach is that it is irrespective of
employees and temporary employees of your agents, contractors, whether the employee uses Java. Theoretically, and in actuality,
outsourcers, and consultants that support your internal busi- the “employee” may not even touch a computer, phone, or device.
ness operations.” (Source: Oracle Java SE Universal Subscription However, the added benefit of using an employee headcount
Global Price List, March 1, 2023; https://www.oracle.com/assets/ simplified the challenge of conducting Java software license
java-se-subscription-pricelist-5028356.pdf) compliance audits.

FOR SPONSORSHIP
DETAILS,
Building a Modern CONTACT
FALL Analytics Ecosystem STEPHEN FAIG
STEPHEN @ DBTA.COM
2023 OR 908-795-3702

28 BIG DATA Q UA RT E R LY | SUMMER 2023


DATA DIRECTIONS

VENDORS HAVE A RIGHT TO BE PAID support and still has the right to use
FOR THEIR SOFTWARE Oracle has a right to be the perpetual license while analyzing
No one disputes the fact that software paid for its software, alternatives. However, the subscription
vendors like Oracle have a right to be model is very different in this respect.
paid for the software they create. If you
and armed with this new When a customer stops paying for
use commercial software and have not subscription plan, it will the subscription, the right to use the
purchased a license, expect the vendor seek out organizations software stops immediately. Likewise,
to come knocking on your door. That that are using access to the software is immediately
is exactly what Oracle is doing. blocked. This pay-as-you-go model cer-
unlicensed versions tainly has its advantages, but it also has
VALUE FOR PRICE PAID of Oracle Java. its disadvantages.
Under this new pricing model, the
quantity of the licenses required is HEAD IN THE SAND
determined by the number of employ- This is not a time for an organiza-
ees, not just the actual number of employees that use the pro- tion to puts its head in the sand. Java is everywhere. Oracle has
grams. Dean Bolton, chief architect at LicenseFortress, stated, a right to be paid for its software, and armed with this new
“The new Java pricing does not reflect the value Java brings to subscription plan, it will seek out organizations that are using
each organization, and some customers will struggle with justi- unlicensed versions of Oracle Java. It’s important to determine
fying the higher price tag.” a company’s exposure to this significant licensing liability. It
For most companies, this headcount pricing represents at least is equally important to determine who is responsible for the
a 3–5x increase in the price they would have paid under the pre- license. Once you understand your risk, weigh the cost of an
vious metrics. Organizations in which a small percentage of the annual subscription against the cost of moving to alternative
company needs access to Java will still be expected to license sources of Java, such as OpenJDK. That option may require a
everyone under this broad definition of an employee. complete redesign and development of a well-conceived appli-
cation, but that approach may also be optimal.
THE DOWNSIDE OF SUBSCRIPTIONS For some nighttime reading, we have included a chart that
Software vendors are generally transitioning customers as provides a basic breakdown of the cost of the new Java licensing
quickly as possible to subscription-based models. Under the model. Remember, this is based on a very broad definition of
perpetual-based license model, when the vendor changes its an employee. It’s good for Oracle but dangerous for unlicensed
pricing, the customer always has the option to stop paying for Oracle customers.

D BTA.COM/ BIG DATA QUARTERLY 29


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