The new metric could be a game changer.
On January 23, Oracle made changes to its pricing model for Java SE subscriptions (we discussed it here). The vendor removed Named User Plus (user licenses) and Processor (server licenses), and replaced them with a new licensing model called "Employee for Java SE Universal Subscription".
The choice behind the change-according to the vendor-is to "combine licensing and support into a simple, single subscription". On the one hand, the simplification would facilitate license management with the new employee count, and on the other hand, it would guarantee greater flexibility in managing updates and upgrades of Java applications by releasing from "fixed" development updates the transition to new versions of Java.
The per-employee pricing plan, considering the licenses based on the number of users and processors, has to take into account the actual number of employee (including full-time, part-time, and temporary employees, as well as third-party employees who support the company), not just those who use the programs.
Prices start at $15 per month for up to 999 employees and drop to $5.25 per month for between 40,000 and 49,999 users.
Oracle cited an example in which a company with a total number of 28,000 employees, including full-time, part-time employees and agents, consultants and contractors, would have to pay $2.268 million per year.
Considering that in the majority of companies, Java users and the processors on which they base their CPUs are a small percentage of the total number of employees, the costs will increase exponentially. Below is a quick snapshot to give the idea:
In the new subscription notes, we also read:
Therefore, existing Oracle Java SE licenses using Processor and NUP metrics remain valid and Oracle states that they can be renewed under existing terms. However, it is currently unclear whether this also extends to increasing the quantities of Processor or NUP licenses, nor is it clear how long Oracle will allow renewal on existing terms.
Will it also apply in cases where there is an contractual agreement that involve Oracle Java subscriptions within ULA?
An Oracle ULA (Unlimited Licensing Agreement) is a contract that allows a deployment model of Oracle products, in all defined components (hardware, cloud technologies, etc.), with an unlimited licensing type, including support and maintenance services (at 22% of the total annual ULA cost).
This type of agreement is generally stipulated by Oracle with major customers who are massively using Oracle products and therefore need easier access to additional licenses. The company pays an upfront fee to obtain as many licenses as it wants for a given set of products in a predetermined period of time.
Typically, an ULA lasts three years, and at the end of this period Oracle requests the detailed documentation of the distribution of all Oracle products used and it processes the information received to determine the number of regular licenses to be granted.
For growing companies or for companies that have projects that involve huge consumption of Oracle products, the ULA can offer significant savings over purchasing individual licenses in advance, because you have a single contract and a single invoice with savings at scale.
At the end of the ULA term, the company is faced with a decision: certify an exit from the ULA or renew a new unlimited license agreement.
In the case of Java ULA, there are some cases where it is offered to some major customers, but unlike traditional ULA it is an unlimited subscription contract that at the end of the period (usually 3/5 years) does not release perpetual licenses. In fact, it is necessary to uninstall all Java or renew/purchase a new contract.
Most licensing experts do not reccomend subscribing to it, because it is like starting from scratch at the next ULA (which will definitely be more expensive). But there are cases where companies do this for a very specific "kick the can down the road" strategy: in case of large exposure, a 3-5 year time period would allow to remedy the financial risk or to forsee alternative solutions to Oracle.
If you have a ULA, the first step is to verify the scope of the covered products (did you also include Oracle Java with an unlimited subscription agreement?) because functions and products not specified in the ULA must still be licensed since they are subject to Oracle License Management Services (LMS) audits. Oracle often promotes ULA as a panacea for all problems that can arise with Oracle products, and this can give a false certainty to compliance.
Many are deceived and consume Oracle Java software without actually being covered by the contract. Typically, this leads to an unexpected bill at the end of the ULA or a violation of deployment terms, forcing organizations to certify earlier than expected.
In the event that you do not receive renewal under the old terms, the choice of exiting or renewing without Java being part of the ULA products seems to be the most cost-effective.
However, before Oracle knocks on your door at the end of the contract period to demand accountability relative to the deployed, you can adopt strategies to map the actual needs of Oracle Java subscriptions.
This awareness helps you:
We will delve into these topics in the webinar "Know the Impact of the New Metrics for Oracle Java" scheduled for April 6 (in italian language only), providing solutions and tools to better address the negotiation with Oracle, whatever contract we have planned for our Oracle Java licenses.
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