Java / Java licensing

Major Java Licensing Updates

Major Licensing Updates

  • 2019: Shift to subscription-based licensing, ending perpetual licenses.
    • Named User Plus: $1.75/user/month.
    • Processor Licensing: $20/processor/month.
  • Sept 2021: Java 17 and onwards under NFTC license.
    • Free for initial use.
    • A subscription is needed for security updates after 2 years.
  • 2023: Employee Metric License.
    • $15/employee/month.

Introduction Major Java Licensing Updates

Introduction Major Java Licensing Updates

Oracle has implemented several significant changes to Java’s licensing models. These updates have profoundly impacted how businesses manage and budget their Java usage.

This article overviews the major updates to Oracle Java licensing, focusing on the key changes in 2019, 2021, and 2023.

2019 Licensing Change: Shift to Subscription-Based Model

2019 Licensing Change: Shift to Subscription-Based Model

End of Perpetual Licenses:

In 2019, Oracle made a groundbreaking shift in its Java licensing policy by discontinuing perpetual licenses. This marked a departure from the traditional one-time purchase model, in which businesses could use Java indefinitely without recurring costs.

Introduction of Subscription-Based Licensing:

Oracle introduced a subscription-based model for Java SE. Key aspects of this change included:

  • Subscription Requirement: Businesses must subscribe to receive updates and support for Java SE.
  • Named User Plus (NUP) and Processor Licensing: Licensing costs were based on the number of named users or the number of processors.
    • Named User Plus: $1.75 per named user per month.
    • Processor Licensing: $20 per processor per month.
  • Ongoing Fees: This change meant organizations had to budget for recurring monthly or annual fees instead of a one-time purchase.

Impact on Businesses:

The move to a subscription model increased costs for many organizations, requiring careful financial planning and adjustments to accommodate the new ongoing expenses.

September 2021: Introduction of the NFTC License Agreement

September 2021: Introduction of the NFTC License Agreement

Java 17 and Onwards:

In September 2021, Oracle introduced a new licensing agreement for Java 17 and future versions. This was a notable shift from previous policies:

  • NFTC License Agreement: Java 17 and later versions were licensed under the NFTC (No-Fee Terms and Conditions) license agreement.
  • Free for Development and Production: Java is free for use in development and production environments under the NFTC license.
  • Security Updates: Businesses that require security updates and support beyond the initial two years must purchase a subscription.

Key Points:

  • Initial Free Access: The NFTC license agreement made Java 17 and onwards free for initial use, lowering the barrier to entry for new projects.
  • Subscription for Updates: Organizations needing long-term security updates and support must plan for subscription costs after two years.

2023: Introduction of the Employee Metric License

2023: Introduction of the Employee Metric License

Biggest Licensing Change:

In 2023, Oracle introduced what is considered the most significant change to its Java licensing model:

  • Employee Metric License: This new model simplified the licensing process by covering all employees, regardless of their actual use of Java.
  • Cost: The Employee Metric License costs $15 per employee per month.
  • Simplification: This model removed the need to track individual users or processors, reducing administrative overhead.

Cost Comparison:

  • 2019 Model (NUP and Processor Licensing): For a company with 12,000 employees, assuming all are named users:
    • Annual cost: $1.75/user/month * 12,000 users * 12 months = $252,000.
    • Adding processor licensing: $20/processor/month * 100 processors * 12 months = $24,000.
    • Total annual cost: $252,000 + $24,000 = $276,000.
  • 2023 Model (Employee Metric License): For the same company:
    • Annual cost: $15/employee/month * 12,000 employees * 12 months = $2,160,000.

Percentage Increase:

Percentage Increase=(New Price−Old PriceOld Price)×100Percentage Increase=(Old PriceNew Price−Old Price​)×100

Percentage Increase=(2,160,000−276,000276,000)×100Percentage Increase=(276,0002,160,000−276,000​)×100

Percentage Increase≈683%Percentage Increase≈683%

Implications for Businesses

Financial Impact:

The transition to the Employee Metric License represents a significant business cost increase. Careful financial planning and strategic adjustments are required to manage the higher expenses.

Simplified Compliance:

While the costs have increased, the new model simplifies compliance and license management. Organizations no longer need to track individual user access or processor usage, reducing the administrative burden.

Strategic Adjustments:

Businesses must adapt their strategies to accommodate these higher costs. This may involve:

  • Evaluating Alternatives: Considering OpenJDK or other JDK providers to mitigate licensing expenses.
  • Optimizing Usage: Reviewing and optimizing Java usage within the organization to ensure that all licenses are necessary and cost-effective.

Conclusion

Oracle’s major updates to Java licensing, from the shift to subscription-based licensing in 2019 to the introduction of the Employee Metric License in 2023, have significantly impacted how businesses manage and budget their Java usage.

These changes underscore the need for organizations to stay informed about licensing policies and adjust their strategies accordingly.

By understanding the historical trends and implications of these updates, businesses can navigate the complexities of Java licensing, ensure compliance, and optimize costs.

Author

  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, improving organizational efficiency.

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