Azul Systems Sees Channel Opportunities In Shifting Java Space
Spurred by changes In Oracle’s Java licensing, Azul says businesses are turning to the company’s OpenJDK platform as an alternative, spurring demand through the vendor’s VAR, systems integrator and distributor partners.
Azul Systems is seeing a surge in demand for its open-source Java platform as businesses and organizations look for alternatives to Oracle Java after Oracle implemented a new subscription license plan in early 2023.
The trend is also creating opportunities for Azul’s channel partners, Azul executives said in interviews with CRN. It also comes on the heels of a significant expansion of Azul’s global channel program the company announced in October.
“Our products are doing super well in the channel,” Azul co-founder and CEO Scott Sellers (pictured) said. “There are so many great partners out there talking to customers every day that are wrestling with the challenges that our products help with. We really credit the channel for a lot of our overall growth, the success we're seeing.”
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Azul, headquartered in Sunnyvale, Calif., offers Azul Platform Core, a fully supported distribution of the open-source OpenJDK (Open Java Development Kit) software for deploying and running Java applications.
Java, which launched in 1995, is one of the industry’s most popular programming languages (along with Python and C++) according to the TIOBE Index that tracks the popularity of programming languages. Java is widely used for enterprise software development, including server-side applications, software development for cloud computing, and Android application development.
“Java remains the dominant language for transactional logic and business logic, connecting applications, all those types of things,” CEO Sellers said.
OpenJDK is an implementation of the Java Platform, Standard Edition (Java SE). Oracle acquired Java as part of its $7.4 billion acquisition of Sun Microsystems in 2010. Since then, Oracle has continued to develop Java and today sells commercial Java SE licenses. OpenJDK, which is developed by Oracle, Red Hat and the JDK community, remains in the public domain under the GPL-2.0 license.
Oracle Licensing Plan Changes
Oracle has been selling Oracle Java SE as a commercial product since 2019 and until 2023 offered Java license fee options based on the number of named users and server processors. But in January 2023, Oracle implemented the Java SE Universal Subscription license plan, replacing the legacy Java SE Subscription and Java SE Desktop Subscription license plans.
Under the new plan, Oracle now charges a monthly universal subscription fee for Java SE that starts at $15 per employee that covers licensing and support for Java SE use on desktops, servers and cloud deployments. Published tier pricing goes as low as $5.25 per employee, per month, for organizations with 40,000 to 49,999 employees and is negotiable for those with 50,000 or more.
Oracle says the new licensing model results in more predictable costs and simplifies license tracking and management by permitting universal use across desktops, servers and third-party cloud platforms. The Java SE Universal Subscription also includes updates and provides customers with triage support for their entire Java portfolio, including third-party libraries and runtimes, according to Oracle.
But the change, especially the fact that the new fees are based on an organization’s total number of employees, not just Java users, has generated pushback from Oracle customers.
“Dig into their per-user subscription and you may see that it isn't actually per-user, but per employee. Even your receptionist and handyman need to have a license, regardless as to whether or not they ever touch the product or even have access to a computer,” noted a May 2024 posting on Reddit, that went on to call the new plan “ridiculous.”
A blog post on the website of NPI, an Atlanta-based IT procurement service provider, said the company analyzed the new pricing tiers and said that some Oracle customers could see “a 2x to 10x (or more) increase in Java-related expenditures.” Market researcher Gartner concluded that the licensing changes would cost most organizations two to five times more than their previous licensing expenditures.
“That creates a big financial impact for customers,” said Richard Spithoven, EMEA Lead Publisher, Advisory Services, at SoftwareOne, the giant software distributor and services provider, of Oracle’s current licensing plan for Oracle Java SE. In an interview with CRN Spithoven, who earlier in his career worked at Oracle, said many businesses, historically, have not effectively managed or tracked their Java usage because of its open-source nature. Some, he said, are faced with huge bills after Oracle comes knocking to make an audit.
(SoftwareOne in recent years has been expanding its software management services through which the Switzerland-based company not only sells software licenses and cloud services from leading software publishers, but helps clients manage their software assets. That includes the company’s Oracle Advisory Services to help customers with the complex task of managing their Oracle licenses.)
“Oracle, over time, has continued to change the license terms of the Oracle Java distribution, has continued to make it more and more restrictive in terms of where and how it can be used within the enterprise, and also has continued to raise prices,” Azul CEO Sellers said.
“As you might imagine, this was not met very well by the broader enterprise community,” he said of the Oracle license change, “and a transition was already happening where enterprises and developers were choosing, instead of using Oracle's Java distribution, they were using other distributions based on open JDK.”
(CRN reached out to Oracle press relations for comment about indications of customers moving away from Oracle Java since the company implemented the new license plan. But the company has not responded.)
OpenJDK Moves Forward
OpenJDK, meanwhile, has “really raced forward in terms of new capabilities and features and delivering what developers are asking for,” Sellers said. He noted that starting with OpenJDK 9 in September 2017 the OpenJDK community organization adopted a rigorous release schedule with a new, long-term supported edition of OpenJDK every six months – a significant improvement over the earlier cadence of a major release every three or four years, Sellers said. (JDK 23, the current release, became generally available on September 17, 2024.)
All these developments are creating opportunities for companies like Azul Systems and the channel partners they work with as businesses seek lower-cost Java alternatives. In addition to Azul, other OpenJDK-based platforms on the market include Eclipse Temurin, Amazon Web Services Corretto, and Microsoft Build of OpenJDK.
“Enterprises are looking to get off the very expensive Oracle Java distribution and instead move to an OpenJDK base,” Sellers said, adding that alternatives cannot introduce any incompatibilities. “This is really where Azul comes into play and our product platform core is a true drop-in replacement for Oracle. Ours, of course, is pure open source, whereas Oracle's is commercially licensed, so economically ours is much more affordable.”
That’s fueling Azul Systems’ growth in the channel. Altogether the company has some 200 partners globally, including VARs, solution providers, systems integrators and distributors, working with the company. In October, Azul said channel partners contributed 44 percent of the company’s new and up-sell bookings in the first half of its fiscal 2025 and were responsible for a 50 percent increase in inbound opportunities.
In December, Azul reported that new bookings in the EMEA region increased 95 percent year over year for the first half of the company’s fiscal 2025. Channel partners contributed 71 percent of the new business growth in EMEA during that time period, including all business sourced, influenced or fulfilled by channel partners.
“A lot of customers are looking for alternatives to Oracle Java because of the cost,” Spithoven at SoftwareOne said, adding that Oracle is known for taking an “aggressive” approach to negotiating and enforcing software licenses. “That was, for us, the reason to actually start exploring partnerships with a company like Azul.”
SoftwareOne, No. 35 on the CRN 2024 Solution Provider 500, has seen the number of engagements for its Java Advisory Services business grow some 250 percent in the two years since Oracle implemented its new licensing plan, Spithoven said. The company works with Java users around the world, many of whom have either had to enter into licensing contracts with Oracle, are in the process of negotiating contracts, or are afraid they will have to, he said.
SoftwareOne has worked with Azul Systems for several years and resells the company’s software. Spithoven said his team often brings Azul into the picture when conducting Java assessments for clients and providing them with options.
Other channel companies in Azul’s universe include reseller/solution provider giants such as CDW, SHI International, World Wide Technology and Zones, and systems integrators including DXC Technology, Capgemini and NTT Data Group.
In addition to the Azul Platform Core, other products in the Azul portfolio include Azul Platform Prime, an enhanced build of OpenJDK that supports applications that require higher levels of performance, responsiveness and efficiency, and Azul Intelligence Cloud, which collects Java runtime data from production environments to improve DevOps productivity. The company also provides advisory services and is expanding into managed services such as Java application and infrastructure security.
Azul, which is committed to a channel-first sales strategy, has relied heavily on its partners as it looks to meet the growing demand for its software and services, Simon Taylor, senior vice president of global channel sales and alliances, told CRN in an interview. In the two years-plus he has been in that post he said Azul has evolved far beyond its original reliance on the channel largely for sales transactions and OEM embedded sales.
“That's a big part of our go-to-market, the channel, resell, distribution,” Taylor said. “We've got some channel partners that have grown their revenue with us 400 percent.”
In October the company announced “a significant expansion” of its global channel program to meet what the vendor described as “substantial year-over-year growth” in partner engagement and revenue contribution. Those plans included quadrupling the number of certified sales professionals, partner engineers, and migration advisory and delivery partners. The plans also included operational improvements to enhance scalability for partners.
The partner program enhancements followed the May launch of the Azul PartnerConnect certification program that has already trained hundreds of partner employees with hundreds more registered to take the training.
Taylor said Azul is well on track to meet its goal of 60 percent revenue contribution from partners in the company’s fiscal 2025, which ends Jan. 31. The company has experienced its fastest channel growth in the EMEA and APAC regions, according to the channel chief.