1. Java Audits Intensify
Oracle’s focus on Java audits continues to expand, driven by the product’s high profitability and the introduction of the “employee metric” licensing model. Under this model, organizations must license their entire workforce, regardless of how many employees use Java.
For example, a company with only 50 Java users out of 10,000 employees may still need to license all 10,000, leading to significant costs. Customers have reported paying millions for a small number of users.
Oracle monitors Java SE security downloads and updates, tracking IP addresses and email domains to identify organizations.
With audit logs dating back to 2019, Oracle targets unlicensed usage. Java’s mention in Oracle’s recent earnings call as a standout revenue contributor highlights its strategic importance.
“Software license revenues were up 3% to 1.2 billion, including Java, which saw excellent growth.”
- Prediction: Audits will increase as Oracle grows its Java sales team.
- Recommendation: Conduct a thorough internal review of Java usage, ensure compliance, and explore alternatives to reduce licensing risks.
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2. Oracle Verified SAM Program Likely to Fail
The Oracle Verified Software Asset Management (SAM) program, launched in 2024, has garnered criticism for its lack of tangible benefits to customers. While marketed as a tool to improve compliance, the primary benefit—a one-year audit waiver—can often be negotiated directly with Oracle’s sales team without requiring program participation. The program primarily serves Oracle audit partners, generating revenue through associated services.
- Prediction: The program’s lack of customer-focused value will hinder its adoption.
- Recommendation: Negotiate audit waivers directly with Oracle for greater control and leverage in licensing discussions. Independent SAM advisors can offer more objective guidance.
3. Increased Pressure for ULA Renewals
Oracle is ramping up efforts to secure Unlimited License Agreement (ULA) renewals, engaging customers earlier in the process and offering “assistance” to steer renewal or certification decisions. End-of-term certifications are increasingly scrutinized, with Oracle often identifying compliance gaps to justify renewals and secure additional revenue.
- Example: Some clients have reported extensive certification audits near the end of their ULA term, revealing gaps that Oracle leveraged to push for renewal.
- Prediction: These tactics will become more prevalent in 2025.
- Recommendation: Manage ULA certifications carefully and involve licensing experts to anticipate Oracle’s tactics and avoid unnecessary renewals.
4. Support Costs Continue to Climb
Oracle’s support cost increases from 4% to 8% during the inflation peak have become standard practice. Organizations with large Oracle estates are significantly impacted. For example, a company paying $2 million annually for support now incurs an additional $160,000 annually due to the rate hike. Oracle often uses these cost increases to nudge customers toward ULAs or Oracle Cloud solutions.
- Prediction: Rising support costs will continue to drive dissatisfaction among customers.
- Recommendation: Explore third-party support options or renegotiate contracts to mitigate costs and maintain financial stability.
5. Shift in Audit Focus to Applications
Oracle is redirecting its audit focus from databases to applications such as Oracle EBS, JD Edwards, Siebel, and Primavera. Additionally, Oracle collaborates with third-party SAM tool vendors to enhance its audit capabilities, though these tools are limited to data collection and do not analyze licensing needs comprehensively.
- Prediction: Oracle will continue to prioritize application audits over databases.
- Recommendation: Avoid disclosing the use of Oracle-verified SAM tools to Oracle, as this simplifies their auditing process. Opt for independent compliance assessments to validate licensing positions.
6. Increased Adoption of Oracle Cloud at Customer (Exa CC)
Organizations with significant Oracle database estates are increasingly moving to Oracle Cloud at Customer (Exa CC) solutions. This shift is often motivated by the desire to escape costly on-premises support contracts rather than embrace cloud benefits. Oracle positions this as a win-win solution for both parties.
- Prediction: Exa CC’s adoption will grow as Oracle continues to promote it as an alternative to traditional support contracts.
- Recommendation: Engage independent advisors to ensure Exa CC adoption aligns with organizational goals and avoid over-provisioning services.
7. Third-Party Support Gains Momentum
The adoption of third-party support for Oracle products is accelerating as organizations seek to counteract rising support costs and diminishing Oracle product usage. This trend, initially focused on Oracle applications, is now expanding to include technology contracts such as certified ULAs. Switching to third-party support can save organizations up to 50%.
- Prediction: Third-party support adoption will continue to rise in 2025.
- Recommendation: Assess third-party support options to identify cost-saving opportunities while maintaining necessary functionality and compliance.
8. Low Adoption of Oracle Database Cloud Services on AWS, Azure, and GCP
Despite Oracle’s partnerships with major public cloud providers, adoption of Oracle Database Cloud services on AWS, Azure, and GCP remains minimal. Customers seem more inclined to migrate off Oracle databases rather than leverage these multi-cloud options.
- Prediction: This trend will persist as organizations prioritize transitioning to alternative databases over adopting Oracle’s multi-cloud solutions.
- Recommendation: Evaluate long-term database strategies and consider alternatives for greater flexibility and cost control.
Actions Oracle End Customers Should Take in 2025
1. Conduct an Annual Oracle Licensing Check
Performing an annual licensing review ensures that your organization avoids unnecessary costs in the event of an Oracle audit. This proactive step can help identify and address potential compliance gaps before they become costly.
2. Optimize Oracle Product Usage
An annual licensing check also helps you understand which Oracle products are actively used and identify opportunities to terminate unused or underutilized products. Reducing unnecessary licenses can significantly cut overall costs.
3. Block Java Downloads and Updates
Configure your corporate firewall to block Java downloads and updates to prevent accidental installations or upgrades to Java SE. This measure can help avoid unintentional licensing liabilities.
4. Plan for Older Java Versions (BCL)
If your organization uses older versions of Java under the Binary Code License (BCL), develop a plan to migrate away from them. These versions pose a licensing risk if updated to the Oracle Technology Network (OTN) model, which is licensable. Oracle has also worked with third-party tools to identify the use of commercial features on BCL Java, such as deployments using the MSI enterprise installer. This could expose your organization to costly “past usage” risks.
5. Manage Rising Oracle Support Costs
If your Oracle support costs increase without a clear mitigation strategy, engage with experts like Redress Compliance. They can help design a strategy to reduce your support expenses and transition to a more cost-effective Oracle strategy.
6. Avoid Unnecessary Oracle ULA Renewals
Organizations with Oracle ULAs (Unlimited License Agreements) should carefully evaluate whether a renewal is necessary. In most cases, a properly managed ULA negates the need for renewal. Independent advisors can assist in stopping the renewal, saving significant costs, and maximizing your license count for future needs.
7. Maximize Your Oracle License Potential
If your organization is nearing the end of a ULA, work with independent experts to ensure that your license count is maximized. This approach can help secure more licenses than you need, providing flexibility and cost savings for the foreseeable future.