New Changes to the Java Price List
Ryan Bendana
Senior Director, Global License & Advisory Services | Software Industry Executive | Cloud & Software Licensing Expert
Sometimes, it’s beneficial to be first. This has always been the case when it comes to the perception of consultants and advisors in the software asset management space when an enterprise software publisher makes significant and material changes to one of their pricing models. If you’re not publishing your thoughts right out of the gate to keep IT leaders up-to-date on the most recent news, are you even worthy of calling yourself an “expert”? There’s a bit of tongue-in-cheek in this question since so many people call themselves experts these days. I’ve been in the software industry for eighteen years and worked on Oracle licensing for the better part of twelve years. Out of those twelve years, I spent five working “in the trenches” for Oracle conducting audits on customers and the remaining years trying to help some of those same customers defend themselves against audits. I’ve seen plenty of changes over the years but this one was different and it made me take a pause to think about this before writing something I think would prove beneficial for Oracle customers.
If for some reason you don’t know about the changes I am referring to, on 23 January 2023, Oracle released a new Java Price List titled Oracle Java SE Universal Subscription Global Price List[1]. The changes reflected in this new Price List may have a material impact on Oracle customers (and non-customers alike) and it is important to be aware of how these changes may affect you. Keep in mind that the changes to the Oracle Java SE Universal Subscription List do not appear to impact (i) Oracle partners who embed Oracle Java into their solutions sold to their customers[2] or (ii) Oracle customers who have actively supported Oracle programs that rely on Java SE runtime[3]. Below, I break down all the important key pieces of information you need to start thinking about before Oracle starts knocking on your door.
Background
Previously, Oracle sold licenses for Java SE under two different products: (i) Java SE Desktop Subscription and (ii) Java SE Subscription. These two products were offered under the Named User Plus and Processor license metrics, respectively. ?As of 23 January 2023, Oracle will no longer offer Java licenses under the Named User Plus and/or Processor license metrics. Instead, Oracle customers will be required to use the Employee for Java SE Universal Subscription license metric. The definition of this license metric is below:
Employee for Java SE Universal Subscription: is defined as (i) all of Your full-time, part-time, temporary employees, and (ii) all of the full-time employees, part-time employees and temporary employees of Your agents, contractors, outsourcers, and consultants that support Your internal business operations. The quantity of the licenses required is determined by the number of Employees and not just the actual number of employees that use the Programs. For these Java SE Universal Subscription licenses, the licensed quantity purchased must, at a minimum, be equal to the number of Employees as of the effective date of Your order. Under this Employee metric for Java SE Universal Subscription Programs(s), You may only install and/or run the Java SE Universal Subscription Program(s) on up to 50,000 Processors, If Your use exceeds 50,000 Processors, exclusive of Processors installed and/or running on desktop and laptop computers, You must obtain an additional license from Oracle.
This “new” license metric is what can only be described as a reboot (pun intended) of Oracle’s more commonly recognized enterprise license metric known as Employee[4]:
Employee: is defined as (i) all of Your full-time, part-time, temporary employees, and (ii) all of Your agents, contractors and consultants who have access to, use, or are tracked by the Programs. The quantity of the licenses required is determined by the number of Employees and not the actual number of users. In addition, if You elect to outsource any business function(s) to another company, the following must be counted for purposes of determining the number of Employees: all of the company's full-time employees, part-time employees, temporary employees, agents, contractors and consultants that (i) are providing the outsourcing services and (ii) have access to, use, or are tracked by the Programs.
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If you’ve never had an enterprise license metric with Oracle before, you may be quickly surprised to find that the definition states “the quantity of licenses required is determined by the number of Employees and not just the actual number of employees that use the Programs.” This means that use is not based on the value derived, rather, it’s based on actual number of employees regardless of whether those employees are using the programs! As a former auditor for Oracle, this always proved to be a rather interesting conversation. If you are familiar with Oracle’s enterprise license metrics, you may be somewhat familiar with Oracle’s License Verification Form, or “LVF”, that would be sent out annually. The LVF was designed to obtain a declaration of usage from customers with enterprise license metrics. Of course, the benefit of these declarations for Oracle is that many organizations (public companies, government agencies, and not-for-profits), are all required to disclose license metric related information to the public (such as 10K statements, Comprehensive Annual Financial Reports (CAFR), or 990 tax forms) that an auditor could use to determine whether the declarations could be verified as correct. If there was a discrepancy, the auditor could decide to use whichever number was greater (resulting in a potential non-compliance finding) and the customer would then bear the burden of proof to demonstrate what the correct quantity is and the reasons why. As we used to say in the Oracle auditing world, “If it’s good enough for the SEC, it’s good enough for us.”. Never mind the fact that employee counts may by cyclical for some organizations, you’ll still pay the highwater mark. I wouldn’t be surprised if customers who subscribed to Java SE under this new pricing model start to receive LVFs months prior to their annual subscription renewals. This practice would provide an exceptionally beneficial methodology for sales forecasting for Oracle and enable Java license sales representatives to proactively identify potential license compliance concerns well in advance (and without the cost and complexity of having to conduct a formal software audit). ?
Why the change and why now?
Prior to the newly released Oracle Java SE Universal Subscription List, licensing Java SE under either the Named User Plus or Processor license metric would require customers to count users and/or cores[5]. This meant that a customer would need to identify whether licensable versions of Java were “installed and/or running”[6] This is not an easy task, even with some of the most current software asset management tools. Furthermore, as of October 2022 when I was helping a client defend themselves against an official Oracle Java audit (yes, they actually received written confirmation from Oracle that Java was in scope of the audit), Oracle auditors either refused to, or were incapable of, providing a measurement script for Java despite repeated requests. I found this to be a bit unusual as Oracle has provided measurement scripts for other programs such as Database, Internet Application Server, and WebLogic for several years. What did this mean? Was it possible that Oracle simply forgot to create a measurement script for a program they intended to audit in coming years? Highly unlikely. I don’t think Oracle ever intended to create a measurement script or audit Java SE in the same way they’ve audited other programs in the past. That much is clear now more than ever. Over the previous years, Oracle and their customers found themselves in the same license discussions for Java SE as the other technology programs. These discussions centered around Oracle’s Partitioning policy[7]; namely around the license requirements for Oracle programs deployed in a virtualized environment. The newly released Oracle Java SE Universal Subscription List does away with all of this and creates a much more seamless sales process for Oracle.
I can already imagine the newly drafted emails from Java license sales representatives now:
Dear Customer,
You are currently out of compliance. Here is an ordering document for Java SE licenses based on your most recent Employee count. This subscription includes two years of past usage and one year of go-forward usage for a total of three years. Don’t worry, this already includes our standard volume discounts for your benefit. Please sign no later than the end of our fiscal quarter to ensure compliance with Oracle’s intellectual property.
Your Java License Sales Representative
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What you should be thinking about now.
If you have a current subscription for Java SE licenses, you should likely prepare for the possibility that there will be a significant increase in costs during your next Java SE subscription renewal. I won’t bore you with the numbers. I’m confident you can do math on the back of a napkin. What is most concerning to me is that Oracle’s customers with the largest number of employees will likely pay Oracle the most in Java SE subscription fees (as expected) but small to medium-size businesses may incur a disproportionate increase in costs (as a percentage) moving from the previous Java SE license model to the new one. Historically, small to medium-size businesses could fall under the radar and avoid audits since the cost of an audit to Oracle far exceeded the benefit. That may no longer apply here. Add to this that many of Oracle’s legacy customers may not be entirely familiar with buying subscription services, and it’s looking more and more like customers will be facing many speed bumps along the way. ?
What about support?
We’re passionate about support here at Rimini Street (obviously). Let’s take another look at the Oracle Java SE Universal Subscription Global Price List:
Oracle Java SE Universal Subscription: is defined as the right to use the specified Oracle Java SE Subscription Program(s) in accordance with the applicable metric and to receive Oracle Software Update License & Support (limited to the specified Oracle Java SE Universal Subscription Program(s)), for the term specified on the ordering document. You may not create, modify, or change the behavior of classes, interfaces, or subpackages that are in any way identified as "Java", "Javax", "Sun", “Oracle”, or similar convention as specified by Oracle in any naming convention designation. Your right to use the specified Oracle Java SE Universal Subscription Program(s) for Your internal business operations includes using the Oracle Java SE Subscription Program(s) to run Your Java applications as a cloud service, subject to the terms of the Master Agreement. For the avoidance of doubt, You shall not make the Oracle Java SE Universal Subscription Program(s) themselves available as a cloud service. The subscription term is effective upon the effective date of the subscription ordering document, unless otherwise stated in Your ordering document. If Your order was placed through the Oracle Store, then the effective date is the date Your order was accepted by Oracle. Oracle Software Update License & Support is provided under the Oracle Software technical support policies in effect at the time the services are provided. At the end of the specified subscription term, You may renew Your subscription, if available, at the then current fees for the applicable subscription. If You choose not to renew Your subscription, Your right to use the specified Oracle Java SE Universal Subscription Program(s) will terminate and You must de-install the specified Oracle Java SE Universal Subscription Program(s)[8]. [emphasis added]
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Under Oracle’s new Java SE subscription service, Oracle states that you are entitled to Software Update License & Support (SULS) as part of your Java SE subscription, however, if you’re already paying Oracle for SULS for programs that rely on Java SE runtime, you’re already entitled to such services regardless[9]. I’m sure Oracle doesn’t mind charging you twice for the same support service.
This may very well become a tipping point for customers who wish to maintain their legacy Oracle systems. In other words, if organizations are required to pay Oracle for increased Java SE subscription fees, customers will need to find alternative means for cost savings to make up for this additional license spend. This might mean staying on your legacy Oracle ERP system longer than you originally planned and cancelling your Oracle support contract. Seth Ravin, CEO of Rimini Street, has mentioned this time and again; no matter what size your organization is, there is never enough funding in the budget to do everything IT wants to do. Rimini Street is the only organization capable of helping you achieve tangible cost savings while fully supporting your Oracle investments to put you back in the driver’s seat of your Oracle relationship. ???
Conclusion
Java SE Universal Subscription Global Price List may materially impact Oracle customers; however, this is the moment that IT organizations need to start re-evaluating their spend and find innovative ways to focus on what matters most. If any of these new changes are confusing to you or you have other Oracle license related questions, please reach out. I’d welcome a conversation and it won’t cost you anything but your time. Nobody loves Oracle customers more than Rimini Street.
[2] “Java SE Universal Subscription is available only for full use. It is not eligible for Application Specific Full Use (ASFU) licensing, Embedded Software Licensing (ESL), Independent Software Vendor (ISV) licensing, or redistribution.”
[5] “You are responsible for ensuring that the named user plus per processor minimums are maintained for the programs contained in the user minimum table in the licensing rules section; the minimums table provides for the minimum number of named users plus required and all actual users must be licensed.”
[6] “Processor: shall be defined as all processors where the Oracle programs are installed and/or running.”
Technology Service Management
2 年Thanks for sharing. You've presented complex information in an easy to understand manner.
Licensing/SAM Expert | Audit Defense Specialist | SAM Evangelist | Problem Solver
2 年Good article. Instead of posting about the pricelist changes my plan is to publish “the definitive guide to removing Oracle Java” and give the uninitiated a view of how to avoid the issue entirely.