Why Java in 2023 could destroy your software budget

Risks of the new subscription licensing model and strategies per fronteggiarli.

On January 23, 2023, Oracle changed the subscription licensing model for Java. As you can read here, we are witnessing a significant change: from a mixed model based on Named User Plus (NUP), client-side and Processors (server-side), we are moving to a license based on the number of employees.

This is a change that could result in an exponential increase in spending... until it absorbs every resource allocated to the software (and even more).

When should a company license Oracle Java?

Depending on the versions you use, you may need to license your use of Oracle Java by subscription when you use it for commercial purposes not related to the support of other Oracle applications.

Originally, the licensing model had two types of subscriptions:

• one based on the number of actual users (using the classic Named User Plus – NUP metric) to license client-side usage
• one based on the number of processors to license server-side usage

What has changed?

The "when"criterion - i.e. when there is a need to buy a subscription - has not changed. However, we have a new metric: employees, i.e. a subscription based on the total number of employees in the company. It is the latter that could explode the cost associated with Oracle Java for most medium/large organisations.

In fact, the monthly price starts at USD 15 per user (up to 1,000 employees) and rises in steps up to USD 5.25 per user in the case of 49,999 employees. So, just to give an example, someone with 5,000 employees (we will explain later who is to be considered an "employee") will henceforth incur a monthly cost of USD 10.5 per user or USD 52,500. So we are talking about $630,000 per year, regardless of the degree to which Oracle Java is used in the company.

It seems that this will quickly make Oracle Java incredibly expensive in large companies. With 40,000 employees, a number common to many Italian Enterprise realities, the Java cost will now be $210,000 per month ... which is just over $2.5 million per year. The shift from licensing only users/processors to licensing everyone will likely see significant increasesfor many organisations.

But exactly who is to be considered an 'employee'?

To simplify, Oracle defines an 'employee' as: 

• any full-time, part-time - even temporary - employee of the company
• any full-time, part-time - including temporary - external employees or employees of external companies that support the company.

here the original definition:

(i) tutti i Suoi dipendenti a tempo pieno, part-time e temporanei, e (ii) tutti i dipendenti a tempo pieno, part-time e temporanei dei Suoi agenti, appaltatori, outsourcer e consulenti che supportano le Sue operazioni commerciali interne

To use the same example Oracle gives in the new price list: do you have 23,000 direct employees (full-time or part-time) and 5,000 agents/consultants working for you also on a part-time basis? Then we are talking about 28,000 licences.

A very considerable cost. But exactly how much?

Let us give some examples that are intended to be representative of a Java installation present in the medium/large (Italian) enterprise. The list also speaks of situations where Java operates on more than 50,000 processors, but this is not a useful case for the realities present in our country.

Example 1 - Medium-sized enterprise

• Employees: 450
• External consultants: 50
• Java users: 40
• Java processors: 10
• 2022 Model: 4.200 USD/year
• 2023 Model: 90.000 USD/year (+2043%)

Example 2 - Enterprise

• Employees: 8000
• External consultants: 500
• Java users: 1200
• Java processors: 130
• 2022 Model: 65.850 USD/year
• 2023 Model: 1.008.000 USD/year (+1431%)

What can be done?

The situation is not easy but it is possible to reduce the impact (without firing anyone!). We advise you to start with these steps:

1. take a seat (you never know!)
2. determine the applicable number of employees
3. determine the amount of the new model
4. recover from fainting (that's why point 1!)
5. determine who uses Oracle Java and why
6. determine which installations are licensed (and here tools such as Snow Software 's Snow Inventory Java Scanner become indispensable) and which are not (e.g. Java not for commercial use or included in a WebLogic bundle)
7. evaluate alternatives to Oracle Java, such as OpenJDK

If you wish, at WEGG we can help you determine all the variables and the perimeter to be managed.

Of course, migrating from Oracle Java to a third-party alternative is never that simple, but it may be the only economically responsible option available to you.

For fainting there is not much we can do but... we can be there for you and provide support. We are continuing to monitor this change and the impact it will have on our customers. We also talked about it in a webinar on the subject. 

                                                                 WATCH THE REPLAY!

Article by Jary Busato, SAM/ITAM Ambassador&Lectures in WEGG.