This past January, Oracle quietly rolled-out a bold change to Java licensing and – in effect – how it generates Java SE Subscription revenue. Oracle’s new Java SE Universal Subscription is, in effect, a replacement for the Named User Plus (NUP) and Processor license models. Under the new model, Oracle now bills customers for Java based on the total number of employees rather than processors or desktop users.
This shift marked a significant departure from the vendor’s previous approaches to ensuring customers pay more for Java – particularly as it relates to software license audits. Why waste so many resources on overly involved (and frequent) software license audits when you can just charge everyone in the customer’s organization for Java usage?
Java SE Universal Subscription Points to Bolder, More Aggressive Revenue Tactics from Oracle
As always with Oracle, you have to read the fine print to fully understand the implications of the new licensing model on your unique deployment. But the vendor has made one thing crystal clear – it is increasing pressure and intensity in securing the Java revenues it believes it’s rightfully owed. If there’s one instance of Java usage in the enterprise, they want the entire organization to be licensed.
The vendor is behaving accordingly. Over the last 10 months, NPI has seen Oracle’s Java account teams aggressively push clients to pay according to the Java SE Universal Subscription model requirements. Oracle has submitted customer cost estimates based on publicly available employee counts including a projected non-employee consultant uplift. As these tactics unfold, NPI recommends clients take the following actions to explore options and actions that can reduce or eliminate the cost impact of these changes.
Define Your Java Footprint
To understand the implications and possible mitigation options, customers must first gain a clear view of their Java footprint. Conduct a detailed consumption analysis identifying the extent of Java (Processor and NUP) currently in the environment. Determine what portion is of no cost per Oracle’s definitions and calculate potential SE Subscription exposure using both the previous and current calculation models.
Note – strong Oracle licensing expertise is a must-have during this exercise. That includes a detailed understanding of Oracle’s language and requirements as well as in-the-trenches experience with Oracle’s interpretations of customer usage data.
Use the Potential Annual Financial Exposure to Consider Alternatives
Large enterprise Oracle customers do have alternatives to simply migrating to the Universal SE Subscription model. They include:
- Migrating to OpenJDK or Another Alternative: Based on the potential Oracle bill, does it warrant removal and cleansing of Java from your environment and implementation of OpenJDK or another Java alternative? If yes, you have the potential to tell Oracle to go away. However, carefully consider the challenges with maintaining a non-Oracle Java environment as Oracle closely watches downloads.
- Push to be grandfathered into former SE Subscription model: Using the details of the consumption analysis, customers can reduce the Java footprint by optimizing their environment prior to engaging the Oracle Java account team. It’s important to recognize this may only be a temporary solution as there is no guarantee Oracle will allow renewals in the future under this model.
Visibility is Your Best Negotiation Leverage
Oracle’s decision to introduce the Java SE Universal Subscription is a gamechanger for how the vendor monetizes Java. It’s always been important for large enterprise Oracle customers to have visibility into Java usage (just ask the thousands of customers that have gone through an Oracle Java software license audit in recent years). Now, however, it’s even more critical for any customer that wishes to push back on the cost implications of Oracle’s new subscription model.
Understanding where Java is deployed, why it is being utilized, and how the use of Java supports business operations puts IT and procurement leaders in a far better position to negotiate with Oracle. It’s also crucial to establishing potential chargeback capabilities across those units leveraging the technology.
Oracle’s history of Java licensing changes is complicated, and many large enterprise customers remain unclear on how they impact their unique environment. This latest change is no exception. If your organization is looking to fully understand the implications of the new Java SE Universal subscription model – including any steps you can take to minimize the impact – NPI can help. Contact us to learn more.