Oracle Java audits push firms to open-source, cost savings sought

A new global survey of 500 IT asset management (ITAM) and software asset management (SAM) professionals highlights the increasing financial burden of software licence non-compliance, with 27% of enterprises spending more than USD $500,000 annually to resolve related issues.

The survey, conducted jointly by Azul and the ITAM Forum, reveals that Oracle Java remains a significant concern, as 73% of respondents reported undergoing an Oracle Java audit within the past three years. Nearly eight in ten organisations stated they have migrated, or intend to migrate, to open-source Java alternatives to manage risk and cost more effectively.

Licence management complexities

The research points to a shifting landscape shaped by hybrid cloud architectures and a growing inventory of business applications. These changes have resulted in more complex vendor terms, complicating compliance and visibility across teams. The report notes that many organisations face difficulties in tracking software usage consistently, whether in on-premises environments or across cloud platforms, which increases vulnerability during vendor audits and exposes organisations to financial penalties.

The scope and responsibilities of ITAM and SAM functions have sharpened in response. Once viewed as straightforward asset tracking roles, these functions are now regarded as critical for safeguarding budgets, mitigating audit risks, and guiding key technology decisions within enterprises.

Common compliance challenges

Compliance and the management of excessive licensing were identified as the leading challenges by 37% of survey participants. In addition to the substantial financial outlay for resolving licence issues - which encompass audits, unexpected licence purchases, and penalties - participants cited complex software configurations as a major hurdle, with 25% reporting difficulties in tracking application usage across increasingly intricate systems.

The survey found that 29% of respondents struggle to manage software usage information, especially when tracking across different teams or between on-premises and cloud infrastructures. Additional compliance and management challenges included aligning teams such as IT, software development, legal, and procurement (27%), resource constraints in handling compliance (24%), higher prices related to renewals and licences (24%), and coping with evolving vendor rules (23%).

Self-managed audits and persistent difficulties

The majority of organisations (74%) reported handling licence discovery and software audits primarily or entirely with internal teams. Despite this self-reliance, many face challenges in maintaining accurate records (26%), comprehending licensing terms (23%), and delivering precise compliance metrics (23%).

The survey indicates that 81% of organisations conduct licence audits at least twice a year, with 25% doing so continuously. About a quarter of organisations experience regular financial penalties and legal actions, underscoring the operational and budgetary disruptions caused by audits.

More than 30% of respondents noted that audits have led to significant operational disruptions, including unplanned budget impacts, a shift in vendor relationships, and stalled projects.

Migration from Oracle Java

Oracle Java licensing and audit pressures were a source of concern for 96% of those surveyed, with issues stemming primarily from Oracle's employee-based pricing model. Many companies are investing in new tracking tools, monitoring systems, and internal audit procedures to ensure they comply with licensing requirements or avoid needing Oracle licences altogether.

In response, 79% of organisations have migrated, are migrating, or plan to migrate to open-source Java alternatives. Security and reliability were the main factors in this decision for 51% of those considering migration, while cost reduction and simpler compliance were cited by 42% and 40% respectively. Among organisations that had already completed migration, 57% highlighted security and reliability as their chief reasons.

There was also a strong perception of financial benefit: 66% of respondents estimated potential savings of at least 40% compared to Oracle Java licensing costs. Only 1% believed that migration would not yield savings.

Market dynamics and sector growth

These findings emerge against a backdrop of sector growth, with the ITAM market expanding from USD $1.15 billion in 2019 to USD $1.49 billion in 2023. The SAM market subset is expected to grow at a 16% compound annual growth rate through to 2029, reflecting increased spending on software - now accounting for roughly 29% of total IT budgets - as well as the greater intricacy of cloud-based and virtualised licensing models and raised regulatory compliance requirements.

"The results highlight a fundamental mismatch between the complexity of modern software licensing and the resources organizations rely on to effectively manage software compliance. ITAM and SAM professionals are becoming increasingly vital as organizations increasingly recognize that poor license management can result in significant financial penalties and operational disruptions. They must have the resources and executive buy-in to ensure compliance and successful license management," said Martin Thompson, founder of the ITAM Forum.

"The data reveals a concerning trend where the increasing complexity of vendor licensing and pricing has turned routine upkeep into recurring six-figure compliance exercises. When 73% of enterprises have been audited and one in four now spends more than $500,000 a year cleaning up license issues, the cost of merely staying compliant with software licensing and pricing is unsustainable. Specifically, when it comes to the uncertainty of Oracle's ever-shifting Java licensing terms, organizations shouldn't have to burn ITAM resources, interrupt projects, or absorb surprise penalties just to run their applications. Moving to open-source alternatives lets them break free from the audit treadmill, regain budget and focus on delivering value," said Scott Sellers, co-founder and CEO at Azul.