Oracle has started to dispatch Java audit letters to Fortune 200 companies for the first time, according to one licensing expert.

Big Red announced a new licensing regime for the popular programming language and development environment in January 2023. It said Java SE Universal Subscription would offer customers "a simple, low-cost monthly subscription that includes Java SE Licensing and Support for use on Desktops, Servers or Cloud deployments."

But industry experts have pointed out that businesses with limited Java use would have to license the software per employee under the latest model, a dramatic shift from the one previously offered by Oracle. Gartner estimated the per-employee subscription model to be two to five times more expensive than the legacy version.

While smaller companies with as few as a hundred employees had received Oracle audit letters asking them to clarify their Java licensing position, it had so far held off quizzing the largest companies. But that has changed in recent months, according to Craig Guarente, founder and CEO of Palisade Compliance, an independent Oracle licensing advisory company.

"A month ago, I would have said on the top end, that Oracle was not auditing the Fortune 100 or Fortune 200 companies, so there was a threshold on the top end, but that's gone now," he said. "In the last month, we've seen official audit letters from Oracle to Fortune 100 companies out there. Some of them were existing Oracle Java subscription users, who had renewals coming up and some of them weren't paying Oracle anything for Java, so there's really no differentiation there."

Guarente was speaking on a webinar hosted by Azul, which helps organizations move away from Oracle Java to open source alternatives.

Donna Walker, Azul director of enterprise sales, said Oracle had requested an annual licensing fee of $4 million when a retail client switched to per-employee licensing while rolling out a new point-of-sale system. But by using Oracle Java for the PoS, and migrating the rest to open Java, they were able to achieve a 90 percent saving, she claimed.

Guarente warned that customers should evaluate their position and only pay for Java where necessary. Signing up to a long-term agreement may make a customer a hostage to fortune when it comes to renewal, he said.

"Once you're locked in, if you're paying Oracle a million dollars a year and you did a three-year subscription, what do you think is going to happen for that renewal? It's not going to be a million dollars, it's going to be as much as Oracle can generate, and if you are locked in and can't move away from Oracle at that point within 30 or 60 days, your renewal is going way up."

Last year, Gartner said clients' experience since the new model was introduced showed a steep increase in Oracle licensing costs such that by 2026, more than 80 percent of Java applications will be deployed on third-party runtimes, up from 65 percent in 2023.

In February 2023, Gartner warned that Oracle "actively targets organizations" on Java compliance following the introduction of new contractual terms for the code.

In July last year, The Register revealed Oracle was sending unsolicited emails to businesses offering to discuss Java subscription deals, seemingly in an effort to extract information that could be to its benefit in future license negotiations. ®

https://www.theregister.com//2024/06/10/fortune_200_oracle_java_audit/