Experts Warn of Rising Costs as UK Universities Commit to Oracle Java SE

Oracle Waives Historic Java Licensing Fees Under New Subscription Model

UK universities and colleges have formalised a framework agreement with Oracle, valued at up to £9.86 million ($13.33 million). This arrangement enables institutions to adopt Oracle’s Java SE Universal Subscription model, with Oracle waiving historic fees for institutions that have utilised Java since 2023. Facilitated by Jisc, a membership organisation responsible for procurement within higher and further education, the agreement was reached following consultations with its member institutions to ensure alignment with sector-wide requirements and priorities. According to a procurement notice, institutions using Oracle Java SE must now purchase subscriptions under the new terms, which include a waiver for past licensing fees from 2023.

Oracle’s transition to the Universal Subscription model in January 2023 has drawn criticism from licensing experts. The revised pricing structure, which replaces per-user pricing with a per-employee basis, has been considered controversial. Oracle has described it as a simplified, cost-effective monthly subscription covering Java SE Licensing and Support across desktops, servers, and cloud platforms. Despite Oracle’s justification, licensing experts have warned that the new subscription model could significantly increase costs, with early estimates suggesting up to a tenfold rise in expenses. Gartner analysis has found the per-employee model to be two to five times more expensive than the previous system. In July 2024, Gartner analyst Nitish Tyagi stated that cost increases for large organisations would likely fall within that range, depending on employee count. He also highlighted Oracle’s broad definition of “employee,” which includes part-time staff, contractors, agents, and anyone supporting internal operations, all of whom require a license.

Since the introduction of the new licensing rules, organisations have been encouraged to transition to open-source alternatives. Surveys indicate that only around 10% of users intend to continue with Oracle Java, mainly due to the licensing changes. Furthermore, as Oracle's financial year-end approaches, users are being advised to reassess their Java usage amid concerns over increased software audits. In May, Scott Sellers, CEO of Java firm Azul, noted a global rise in audit efforts, with Oracle expanding its sales presence and targeting organisations based on download activity.

Adding to the discussion, Eric Guyer of consulting firm Remend has stated that most of his clients have opted to avoid licensing Oracle Java, as his firm generally recommends shifting to open-source alternatives. Responding to questions from The Register regarding why UK universities have not moved away from Oracle Java and whether the £10 million agreement was influenced by an audit or audit threat, Jisc’s licensing director, Caren Milloy, explained that the organization, in collaboration with UCISA, had negotiated a tailored deal with Oracle to simplify licensing and enhance efficiency. She also indicated that further details would be shared soon. Overall, while the agreement offers UK universities a structured approach to Oracle Java licensing, concerns over escalating costs and audit risks remain significant.

Editor's Note:

The framework agreement between UK universities and Oracle represents a structured solution to ongoing licensing concerns, particularly in the wake of Oracle’s shift to the Universal Subscription model. By securing a waiver for historic fees and streamlining procurement under Jisc’s guidance, institutions gain a reprieve from licensing uncertainties. However, the broader issue of escalating subscription costs and the expansive definition of “employees” subject to licensing remains a significant challenge. For many organisations, the switch to a per-employee pricing model has led to sharp cost increases, raising questions about long-term affordability and financial sustainability. While this agreement provides immediate clarity for UK universities, it does not fully address the concerns surrounding Oracle’s licensing strategy. With mounting pressure for institutions to explore open-source alternatives, the sector must weigh the benefits of proprietary software against financial constraints and the risk of future audits. Unless these institutions proactively assess their reliance on Oracle Java, they may find themselves facing increasing costs with limited flexibility in their technology choices.

Skoobuzz firmly believes that institutions must prioritise cost efficiency and strategic foresight when making long-term software procurement decisions.