Part One of a Three-Part Series
By Joel T. Muchmore and Arthur Beeman, Founding Partners, Beeman & Muchmore, LLP
Success in sports is sometimes attributed to “divine intervention.” The great Argentine soccer legend Diego Maradona, when asked about his controversial first goal against England in the 1986 World Cup, responded, “a little with the head of Maradona, and a little with the hand of God.” When an odds-defying occurrence is needed to win a match, across all sports and cultures, it’s often referred to as a “Hail Mary” moment.
Negotiating and enforcing the terms of software licensing agreements can be as competitive as any sport, often with enormous stakes, potentially ruinous financial outcomes, and jobs on the line. And, in our experience, no software vendor plays this game more aggressively than Oracle. Instead of playing on the same team as its customers, for years, Oracle has leveraged its Enterprise Resource Planning (ERP) technologies to place it in the lead and its customers deep in a hole.
As with high-stakes sports, relying on a “Hail Mary” moment is a losing game against Oracle’s practices. Better to come prepared with a playbook when stepping on the field, rather than wishing for a miracle.
Enter the Principles of Fair Software Licensing
Fortunately, the Coalition for Fair Software Licensing (CFSL) has put in place the blueprint for such a playbook. Since its inception, CFSL has advocated for the universal acceptance and adoption of the “Principles of Fair Software Licensing” — nine protocols designed to assure fair play and competition in software licensing. To raise awareness regarding Oracle’s Java licensing tactics, this is the first of three blog posts dedicated to reviewing Java licensing terms through the lens of CFSL’s recommended protocols. After all, it is one thing to intuitively understand a practice to be wrong; it is quite another to be armed with an articulated set of rules that explain exactly why and how.
The Twisting Landscape of Licensing Oracle Java
Nowhere are Oracle’s harmful practices more apparent than its ever-shifting licensing of Java SE. Though Java was never explicitly free to use, much less open-source (a common misnomer that itself is worthy of scrutiny), Oracle nonetheless surprised many long-time Java users in the spring of 2019 by launching the Java SE Subscription Global Price List and aggressively cracking down on unwitting legacy Java users. For many licensees, this was complicated by Java’s nefarious tendency to auto-update and the frequency with which it was bundled with third-party software that may or may not provide a pass-through license to the user. Still, while Oracle’s move was deeply unpopular, it did stick to a tried-and-true metric of licensing by processor and desktop installations.
It was Oracle’s next move that left customers hoping for some form of divine intervention. While companies were still fending off the company’s aggressive inquiries, Oracle again surprised customers in January of 2023 with its “Oracle Java SE Universal Subscription.” Any pretenses of value-based licensing were thrown out the window in favor of a monolithic employee-based metric that is wholly indifferent to the number of users and focused solely on the raw number of employees at a company.
Java Licensing in Light of Principles One and Two
The first two Principles of Fair Software Licensing are truly no-brainers – requiring that licensing terms be clear and intelligible and ensuring that licenses cover reasonably expected software uses.
Shouldn’t it be obvious that clear licensing terms allow customers to readily determine their costs and obligations? Equally so, that software vendors should not be in the business of intentionally selling licenses that customers don’t need or want? One would think so, but you would be surprised at just how often crucial licensing terms fail to adhere to these rudimentary concepts.
By design, the number of licenses required for a customer’s expected Java use is utterly divorced from the number of actual Java users. Oracle insists on the purchase of a Java license for every employee regardless of whether they use Java. A company with 30,000 employees is licensed the same, regardless of the number of employees that will never even touch a computer, much less use Java.
Adding insult to injury, Oracle further requires that a company using Java purchase a license for all employees of its “agents, contractors, outsources, and consultants that support [its] internal business operations.” Instead of “clear and intelligible” terms, this clause adds terrifying uncertainty. For example, which employees for the company outsourced by the customer are counted? Is a customer obligated to purchase a license for every employee of a “Big Four” accounting firm? How are worldwide employees counted? And just what are “internal business operations”?
Accordingly, any company attempting to license Java should insert clarity into negotiations by establishing what employees must be counted, and when discussing pricing, customers should seek to tie Oracle’s licensing demands for Java to the customer’s actual use. Finally, customers looking to win the game with Oracle know when to go to their bench and get the appropriate legal and technical counseling.
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Miraculous results in sports events likely have more to do with painstaking preparations and planning than anything else. With this post and the next two, we hope to assist Oracle Java users in demanding fair play rather than relying on divine intervention.
Joel T. Muchmore and Arthur Beeman are the founding partners of Beeman & Muchmore, LLP, a law firm providing tailored software licensing and audit defense counseling.