Why now is a good time to be negotiating with Oracle

In 2019, Oracle started charging for the commercial use edition of Java. Previously, whether you were a business user or an individual, Java was free. There are some 3 billion users of Java worldwide, so this is a juicy new revenue stream for Oracle. Is it a fair and logical step to charge for it? After all, Oracle has spent a lot of money and time developing it over the years. Or, as some market watchers are suggesting, is it an attempt by Oracle to fill a revenue gap created by a combination of:

1/ Declining sales of on-premise Oracle software

2/ A failure to drive significant Oracle cloud adoption

3/ The increasing loss of annual Oracle Support revenues to cheaper third parties

As of February 2019, Oracle announced that Java SE 8 updates will not be available for ‘business, commercial or production’ use without a commercial license. As a result, any business or organisation using Java SE 8 had to quickly evaluate their use of the product and the likely financial impact of this change. Making Java chargeable also added another item for Oracle’s audit teams to review when on customer sites.

Check out my Analyst colleague John Rymer’s excellent new Research Report 'Weighing the options to Oracle's new Java SE subscription' for some tips on evaluating what your Java options are:

Starting to charge for Java has also been the tipping point for some businesses to start re-evaluating where Oracle fits in their strategy and re-assessing the kind of future relationship they want to have with them. For some clients, Oracle is and will continue to be an important and embedded IT partner. But others have now decided that Oracle will play a diminishing role and they are actively looking at alternate software vendors that offer more relevant or more commercially attractive applications.

Oracle is a giant in the software industry and has not grown to the size it is without having weathered competitive and revenue pressures before. But with so many headwinds at the moment, they must be feeling pressure to make deals happen. So with their financial year end approaching on May 31st, now is good time to be evaluating your options and negotiating a better deal with Oracle.