Oracle’s January 2023 pricing change from a processor-based license to per-employee license for standard Java has partners raising questions. Partners are concerned about the change's potential impact on Java licensing costs for end-user customers. The change also has partners looking at opportunities to pursue revenue streams with Oracle alternatives.
The 2023 pricing change was based on total employee counts, not the number of employees using Java.
The price list covers the company's Java SE Universal Subscription program. The pricing starts at $15 per employee per month for as many as 999 employees and drops as low as $5.25 per employee per month for 40,000 to 49,999 users. When announcing the change, Oracle cited an example in which a company with a total employee count of 28,000, including full-time and part-time employees and agents, consultants, and contractors, would be charged $2.268 million per year.
Customers Want Oracle Alternatives
"When they went from a processor-based license cost (usage-based) to an employee-based (seats) cost, that expense could be huge. You’d go from maybe a couple hundred thousand dollars for companies to a sudden expense of possibly millions," said Ed Hut, owner of Software Advisors, an Englewood, Colorado-based software solutions provider. That's opening up an interest in alternatives to Oracle, including to third-party providers like Azul, said Hut.
The steep increase in Oracle licensing costs for the majority of Java users and the move to third-party providers would mean that by 2026, more than 80% of Java applications will be deployed on third-party Java runtimes, up from 65% in 2023, according to Gartner.
Gartner has also warned that Oracle is ready to test whether users comply with Java licensing terms as it sees them. One in five Java users can expect an Oracle audit in the next three years, Gartner said.
"When this change happened, I immediately got calls from several of my customers concerned about this, and they were actually the ones that said, 'What about something like Azul?'" Hut said. "There was a lot of concern in IT departments about this expense and a lot of pressure with existing or ongoing deals - they didn't want to sacrifice revenue to cover this expense. And they were looking to avoid the threat of audits with the Java component, and that was a major factor in their playbook."
Partner Strategy for Oracle Java Pricing Changes
So, what can you do?
Nathan Biggs, of software consultancy House of Brick, suggests organizations:
- "Evaluate your applications that use Java and see if it is possible to use the free OpenJDK instead of Java SE. This may include contacting your application vendors for clarification and to encourage them to support the free version.
- Review your Oracle licenses (especially application and middleware) to determine if they include a bundled entitlement for Java SE. An example is Oracle Fusion Middleware.
- Consider your license compliance on all Oracle products. We expect Oracle to increase audit activity, and they will not limit the scope to Java-only. At a minimum they will audit all Oracle technology products (database, middleware, Java). If you have any compliance issues, determine what can be done to address those before an audit occurs."
Alternatives to Oracle Java
And there are other options, including Azul Platform Core, Amazon Coretto, Eclipse Temurin and Red Hat OpenJDK.
Hut said he's pleased with the decision to migrate customers to Azul, as it resulted in significant savings, improved support and broader opportunities to expand into custom solutions development.
"I was shocked at how seamless the migration was, honestly. Plug it in and away you go. And, when it comes to cost, it's been proven out over multiple customers that they're paying significantly less -- in one instance, 20% less than Oracle," Hut said. "I'll add a verbatim quote from a customer here, too: 'The support through Azul is better than Oracle. I get an actual person on the phone, and I get answers to my questions faster.'"
Hut added that migrating to Azul also offers the potential for partners to expand their businesses beyond reselling and integration and into custom software development.
"Azul’s been a great company to partner with and for us to represent as a solution. It’s created a big opportunity in the channel for partners to provide solutions that aren’t just a one-time transaction, but an entry point into custom Java development," Hut said. "The typical Oracle partner -- doing database and database services, ERP -- should look at this as an opportunity to expand into more comprehensive services and actual development of custom solutions."
