Oracle—The 100-Year Plan

The IT World Changed in June 2018

Then, on June 21, 2018, Oracle announced a fundamental shift in how Java would be licensed and supported. Beginning in January 2019, free public updates for Java SE would no longer be available for commercial or production use. Organizations that had relied on Java as a free, universally available runtime suddenly faced a stark choice: purchase a commercial license or fall out of compliance.

Oracle’s new model—a commercial per-user or per-proces­sor subscription—effectively replaced the previous perpetual license-plus-support approach. The message to the industry was unmistakable: Java, once free for nearly all commer­cial purposes, had become a paid product. A software staple that was being used by nearly every application in existence for free was now subject to the same licensing paradigm as Oracle had so famously been using for its “world’s best rela­tional database management system” for 4 decades. Did some­one say sinister?

Now let this sink in: Oracle waited more than a decade after acquiring Java before making a serious attempt to monetize it—a publicly traded company playing the long game. Gener­ally, in Silicon Valley, anything more than a single quarter is the long game. Once Oracle finally committed to turning Java into a revenue engine, it activated its software compliance machin­ery. And as every software vendor knows, the more audits you conduct, the more revenue you generate. (Hello everyone, your friends from Oracle License Management Services are back to help you calculate how much you really owe them.)

However, auditing Java was unlike auditing any other prod­uct in the technology stack. Java was everywhere—embedded in countless applications, systems, and devices. That ubiquity made the audit process exceptionally difficult and labor-inten­sive. After waiting 10 years to capitalize on Java, Oracle still wasn’t seeing the financial results it expected.

So, in January 2023, Oracle pivoted, and this is the genius/sinister part. Oracle introduced an employee-based licensing model for commercial use of Java. Under this model, an orga­nization must license Java for every employee, regardless of whether they actually use applications that utilize Java.

Oracle’s definition of “employee” is extraordinarily broad. According to the Oracle Subscription Global Price List, an employee includes “(i) all of Your full-time, part-time, tempo­rary employees, and (ii) all of the full-time employees, part-time employees and temporary employees of Your agents, contrac­tors, outsourcers, and consultants that support Your internal business operations.” This restructuring dramatically increased the cost of using Oracle Java for most organizations. The strategy mirrors what happened when Broadcom acquired VMware. Broadcom didn’t simply raise the prices; instead, it repackaged how the software must be licensed, which was a change that has resulted in enormous price increases for the majority of VMware (now VMware by Broadcom) customers.

Here’s an important takeaway from this article: Vendors have the right to be paid for their software, and they decide how to package and price it. Unlike many other software ven­dors, Oracle currently does not charge separately for the AI capabilities embedded in its software. Notice the careful use of the word “currently.” Is Oracle playing the long game again? Sinister.

Oracle AI World

At Oracle AI World 2025, the company made a series of announcements that signal a fundamental shift in its iden­tity from a cloud, applications, and database vendor to a full-fledged AI platform provider. Oracle is now positioning itself as an integrated ecosystem that unifies data, infrastructure, applications, and AI capabilities. For enterprise customers, this evolution presents a clear and pragmatic path to leverage their existing Oracle Database and application investments while lay­ering on modern AI capabilities. This reduces the risk of falling behind in AI adoption and gives longtime Oracle customers a way to modernize without abandoning their current stack.

However, executing this transformation will not be cheap. As the Wall Street Journal notes, “Wall Street expects Oracle’s negative free cash flow to continue for the next three fiscal years, with cash burn for the period totaling nearly $29 billion by the end of fiscal 2028. …” Oracle is already a highly leveraged company and will likely need to take on tens of billions more to finance this shift. However, that is not a major distinction from many of the modern versions of the Silicon Valley giants that are transforming before our eyes into mega AI startups.

Compounding the risk, a significant portion of Oracle’s new cloud business comes from a single customer: OpenAI. But OpenAI itself is a 9-year-old startup that loses billions annually and relies heavily on its ability to raise increasingly large rounds of capital to fund its massive compute requirements.

What remains clear, however, is that Oracle plays the long game. The company has repeatedly navigated major technolog­ical transitions over the decades and continues to deliver sales and earnings growth. The AI era will test that resilience once again—but history suggests Oracle should not be underesti­mated. Buyer beware now and for the next century.