Picture a company that hired no one this year, added no new tools and renewed every contract on time. Its software bill still went up.
That is not a hypothetical for 2027 budgets. Microsoft and Atlassian changed their pricing on their own schedule this year, and Oracle has changed how it enforces Java licensing. None of these increases depends on using more software. It depends on dates in your contracts and the number of people on your payroll and your vendors' payrolls.
Most of that is visible in advance. The problem is that it usually sits with procurement at renewal time, when it should be in the budget model.
Three price rises nobody on your team chose
Microsoft. On July 1, 2026, Microsoft changed list prices for its commercial Microsoft 365 suites globally, announced in December 2025 with "ample time to plan." Microsoft points to added capabilities, including Defender for Office 365 Plan 1 in E3 and Intune additions. UC Today's breakdown of the US list prices shows Office 365 E3 moving from $23 to $26 per user per month, Microsoft 365 F3 from $8 to $10, and F1 up 33% with Teams included. Business Premium and Office 365 E1 did not change. Annual and multi-year customers keep their current prices until their next renewal after July 1, so some organizations will not see this increase until a 2027 renewal.
There is a second Microsoft change that gets less attention. Since November 1, 2025, Microsoft has been moving every online service under the Enterprise Agreement and MPSA to a single price across Price Levels A–D, aligned with the price on Microsoft.com. It applies at each customer's next agreement renewal. In plain terms, the lower price levels that larger customers qualified for by volume stop applying to online services when the agreement renews. UC Today cites an example from SAMexpert in which a 25,000-user E5 customer at Level D goes from about $15 million a year to about $18 million. The July list rise accounts for only $900,000 of that; the pricing-level change accounts for the rest.
Atlassian. New cloud list prices for Jira, Confluence, Jira Service Management and others took effect on October 13, 2026. Atlassian's pricing FAQ is direct about it: existing customers "will pay the new subscription list price for renewals that occur on or after October 13, 2026." PricingSaaS tracked Jira Cloud Standard and Premium rising about 7% in its 300-user, monthly-billing sample.
Our November 4 post was about cutting the seats and tools you do not need. This one is about the costs that rise on the ones you keep.
Oracle Java counts people, not installs
Since January 23, 2023, Oracle has sold Java through the Java SE Universal Subscription, which Oracle's FAQ describes as "sold by an Employee-based metric." The definition in Oracle's price list, dated March 2023 and still the document the FAQ points to, is wide. It covers all your full-time, part-time and temporary employees, plus those of your "agents, contractors, outsourcers, and consultants that support Your internal business operations." The licence quantity "is determined by the number of Employees and not just the actual number of employees that use the Programs."
So for organizations that need a subscription, the bill tracks headcount, not Java use. Oracle's published pricing for organizations with 3,000 or more employees starts at $10.50 per employee per month. Below 3,000, the FAQ lists SMB pricing for eligible organizations: for 501 to 2,999 employees, $10,000 a year plus $147.20 for each employee above 500.
Enforcement has also changed. According to a TG Tactical Law Group attorney writing on Mondaq in April, Oracle's licensing unit, now called Global Licensing and Advisory Services (GLAS), has moved from "friendly" compliance emails to formal audit letters arriving in volume in 2026. The letters go to a named executive, typically the CIO, CFO or General Counsel, and commonly allow 45 days. Scope includes global employee counts, deployments by version and virtualization and cloud environments. That is one law firm's account; Oracle does not publish audit numbers.
Survey figures vary with who is asked. An Azul and ITAM Forum survey of 500 software asset management professionals in early 2025 found 73% had been through an Oracle Java audit in the past three years. Azul's 2026 State of Java report, a separate survey whose sample size ITPro did not report, put it at about one in five. Both are sponsored by a company that sells an OpenJDK distribution. Either way, an audit is not a remote event.
A worked example
Take a mid-market firm with 2,000 people who count under Oracle's definition. It needs an Oracle Java SE subscription for a handful of internal servers that perhaps a dozen engineers maintain.
At Oracle's published SMB pricing, that is $10,000 plus 1,500 × $147.20, or $230,800 a year at list. The price is set by the 2,000 people, not the dozen.
Now the firm signs an outsourced support team of 200 people who work on its internal operations. Under Oracle's definition, they count. That adds 200 × $147.20, or $29,440 a year at list, to a Java line nobody connected to the outsourcing decision. The sourcing choice was made in one budget; the licence cost lands in another.
The same firm has 1,000 users on Office 365 E3. At its next renewal after July 1, the list price rises from $23 to $26, which is another $36,000 a year.
Nobody in this example used more software. Negotiated prices will differ from list, but the drivers are the same: a headcount number and a renewal date.
Licence position is a budgeting job
Every driver above is known before the invoice arrives. Renewal dates are in the contracts. Pricing metrics are in the order documents. Headcount, including contractors and outsourcers, is in the HR and vendor plans. Microsoft announced its July change seven months ahead.
Gartner expects software spending to grow 15.1% in 2026, and credits generative AI for that growth. The increases in this post sit underneath that figure, inside contracts you already have. A bill like that is not unpredictable. It is unmodelled.
What to do before the 2027 budget closes
- Build a renewal calendar with the metric beside each contract. Seat, employee, core or usage. Flag every renewal that falls after a vendor change date: Microsoft's July 1 suite prices, the single EA price at your next agreement renewal, Atlassian's October 13 list. A multi-year term defers an increase; it does not cancel it.
- Run the headcount forecast through every employee-based contract. Ask HR and vendor management for next year's numbers, contractors and outsourcers included.
- Find where Oracle's JDK actually runs, and under which terms. Servers, desktops, container base images, CI runners and the appliances vendors ship to you. Oracle's own FAQ says the subscription does not affect your use of OpenJDK. If you do not need Oracle's JDK, moving to an OpenJDK build is engineering work: testing applications on the new runtime, rebuilding base images, updating pipelines. In the Azul and ITAM Forum survey, sponsored by an OpenJDK vendor, 66% of respondents estimated savings of at least 40% against Oracle Java licensing.
- Name an owner for audit letters before one arrives. Forty-five days is short if the inventory does not exist yet. Involve legal counsel early; this post is not legal advice.
- Check your front-line licences. F1 and F3 had the largest percentage rises in Microsoft's July change, at 33% and 25% with Teams.
The licensing terms are a vendor and legal matter. The inventory, the runtime migration and an architecture that does not tie a little-used component to your total headcount are build work, and that is where we help.
If your 2027 plan includes a Java migration or a licence-driven architecture review, talk to us at midrasolutions.com.