On April 20, 2009, Oracle announced that it had entered into an agreement to acquire Sun Microsystems. With the purchase of Sun, Oracle entered the hardware business and obtained the Java programming language. It took a decade for Oracle to realize the monetizing potential of Java.
At the time, Oracle was—and remains to this day—the world’s leading producer of enterprise relational database software or (RDBMS). When executives at Oracle realized that a large percentage of the world’s enterprise applications used Java somewhere in the software stack, they recognized that they possessed intellectual property that was both ubiquitous and lucrative. It was the perfect answer to recoup the dwindling funds lost to a business world that was coming to realize that the greatest RDBMS ever produced might be both overpriced and unnecessary, and, more importantly, that there were alternatives to the almighty Oracle RDBMS. To Oracle, Java constituted a bailout the company couldn’t get from any bank or government because Oracle owned it.
In early 2017, Oracle announced that it would begin charging commercial users of Enterprise Java for updates/patches released on or after April 16, 2019. Although open source Java remained free, most software companies still built their applications using the more sophisticated version of Java, which meant they needed contracted support of that software from Oracle.
To be software-compliant moving forward, companies had three options. First, they could continue to use versions of Java that were predated April 16, 2019, but only a few security teams would be happy. The second option was to remove Oracle Java from their various environments. The third option, albeit unpalatable, was to purchase a Java subscription from Oracle.
An Oracle customer purchasing a Java subscription at this time had two choices. Purchase a desktop subscription for $30 a year or a server subscription for $300 per processor, per annum. If the customer made a large purchase, typical volume purchase discounts were expected.
FURTHER COMPLICATING THE MATTER
As previously mentioned, many commercial applications use Oracle Java embedded in them. During the installation of these commercial applications, it was common practice to instruct the installer to install Oracle Java, then install the application.
Many customers, unaware of the implications of that sequence of events, shifted the burden of the Oracle Java license from the application vendor to the end customer.
EFFORT BEARS LITTLE FRUIT
Although companies were usually aware that they needed to pay for commercial use of Java, common practice dictated that the companies would wait for Oracle to approach them about this new licensing requirement. This was not the best approach to an ever-worsening problem.
As history would indicate, Oracle is very good at tracking the use of valuable software, even years after that usage had begun. Oracle leveraged the information it gathered when a customer downloaded Java and targeted companies, vendors, and end users at the top of this list.
Oracle utilized an old software licensing collection approach and introduced the Java software license compliance audit. As Oracle learned the hard way, this was a challenging undertaking, given the ability for Java to exist anywhere and everywhere inside an organization’s virtual walls. A Java software compliance audit was labor-intensive and, to be thorough, required searching comprehensively.
Oracle’s objective to monetize Java was not working as planned, at least not at first.
JAVA TSUNAMI HITS WORLD COASTS
On Jan. 23, 2023, everything changed. Having figured out how to license Java in a manner that would optimize profitability, Oracle decided to move away from its traditional pricing model to an employee-based licensing model.
Next, Oracle constructed a broad definition of what constitutes an employee: “Employee for Java SE Universal Subscription: is defined as (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.” (Source: Oracle Java SE Universal Subscription Global Price List, March 1, 2023; https://www.oracle.com/assets/java-se-subscription-pricelist-5028356.pdf)
The amazing aspect of this approach is that it is irrespective of whether the employee uses Java. Theoretically, and in actuality, the “employee” may not even touch a computer, phone, or device. However, the added benefit of using an employee headcount simplified the challenge of conducting Java software license compliance audits.