Oracle's Java price hikes push CIOs to brew new licensing strategies

Avoiding steep price hikes in Oracle Java licensing has become an issue for CIOs, according to a software asset management expert.

Organizations looking to avoid Oracle Java licensing hikes introduced nearly two years ago may save nearly 50 percent of their expected costs by moving to alternatives, said Martin Thompson, founder of ITAM Review, which provides resources to people responsible for IT asset management.

Speaking to The Register following the ITAM Review Wisdom Unplugged event in London this week, Thompson said Oracle's changes to its approach to licensing Java were among the topics of debate.

Oracle introduced a paid subscription for Java in September 2018, and in January 2023 decided to switch its pricing model to per employee rather than per user, creating a steep price hike for customers. In July 2023, Gartner recorded users experiencing price increases of between two and five times when they switched to the new licensing model.

Thompson said unlike most licensing issues, the Java dilemma – whether to stick with Oracle and manage the costs or move to an open source alternative – must go right to the top of the IT organization. "This ultimately needs to be a CIO decision at the end of the day. It's a significant shift," he said.

Unlike swapping out a licensed product such as Adobe Acrobat for an open source alternative, the Java issue is much broader.

"How much have we actually got? Where is it? It's a process of discovery, and then speaking to system owners for all these different Java applications. It's educating people about the significance of the risk of not doing something about it. It's quite a campaign that people need support with," said Thompson.

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Earlier this year, a survey from Azul, a company that provides support for open source Java platforms, found that only 14 percent of Oracle Java subscribers planned to stay on Big Red's runtime environment. Its survey was conducted after the introduction of the employee-based subscription model. The remainder were looking to move some or all of their applications off Oracle environments, it said.

Simon Ritter, Azul deputy CTO, said most organizations are involving CIO-level management in decisions about Oracle Java because it pertains to back-end server applications which are often mission-critical.

"Unplanned downtime with those types of applications is significantly more of a cost than your Adobe PDF reader not working," said Ritter, who has worked on Java projects at Oracle and Sun Microsystems. "That's when the CIO gets involved. If people are looking at migrating from Oracle to a different OpenJDK distribution, then there has to be management involvement to understand the risks. What's the cost benefit? What are our alternatives? Are we going to get value for money? Do we get the same service? All of those types of questions. Because it is mission-critical enterprise application, typically, the CIO needs to get involved."

Thompson claimed Oracle Java users could halve their technology costs by shifting to open source alternatives.

"This is not a sales pitch for these [alternative] vendors because I'm just saying this from the end user perspective," he said, "but you're looking at least 50 percent differential. That's the same even for things like secondary support. All of these are significant differences. It's not like a few pennies here and there, we're talking about significant inroads into the budget."

We asked Oracle to comment. ®