Gartner has slammed AI vendors’ lack of transparency, saying developers are facing sharply increased costs from coding agents.

Since the main AI coding agent vendors have shifted from seat-based licensing to consumption-based pricing, developer teams now face highly variable cost structures.

Developer teams face an emerging problem of escalating costs, said Nitish Tyagi, senior principal analyst at Gartner. AI coding bills were leaping from $20 or $100 to $2,000 to $5,000 per developer per month, while in extreme cases, the bill might hit $20,000 in token charges.

However, software engineering departments get little insight into how token consumption is calculated and billed, making it difficult for them to forecast and control costs accurately. AI coding vendors have not yet delivered built-in features to allow developers to optimise costs in AI coding agents, resulting in cost escalation, Gartner said.

“None of the vendors have incredible features when it comes to cost optimisation,” said Tyagi. Instead, he said vendors were focusing on the concept of “tokenmaxxing” to “boost the high” of token consumption, suggesting that if

developers increase the number of tokens, they will increase productivity gains.

“There is no direct relation between the increase in token consumption and an increase in productivity gains,” he said.

Gartner recommends developer teams optimise token consumption and adopt strategies such as context engineering practices, where software engineers improve the input context provided to AI systems. Another recommended strategy is model routing, where engineering and platform teams direct simpler, high-frequency tasks to smaller models, using frontier models only for complex, high-value work

“All of these things will improve the output quality, and, therefore, will increase the productivity gains as well, so while there is no direct relation between tokenmaxxing and productivity gains, there is a relation between optimisation of token consumption with the output quality,” Tyagi said.

As a result of the lack of cost optimisation tools among vendors and consumption-reduction strategies among users, AI development is in a situation where a developer’s coding agents may cost more than they earn, at least in some parts of the world. Gartner predicts that by 2028, AI coding costs will overtake the average developer’s salary due to rising LLM token consumption and the shift to consumption-based licensing models.

“We’re not saying AI token cost will be higher than every developer’s salary on the planet, because US salaries tend to be higher than in India, for example. But current token costs are already more than most of the salaries in India,” he said.

However, the cost of coding agents does not vary according to where they are consumed, meaning AI coding costs for a developer in India may be equivalent to the salary of an engineer with four to six years’ experience, Tyagi said.

“We’re not saying AI token costs will be higher than every developer’s salary on the planet, because US salaries tend to be higher than in India, for example,” Tyagi said, adding that token costs do not vary by location, and in India they may already be equivalent to the salary of an engineer with four to six years’ experience.

Azul has published a new whitepaper warning organisations that running Oracle Java in production without a paid subscription carries serious financial and compliance risks.

The whitepaper, titled “Oracle Java Uncovered: What Free Java Users Need to Know Now,” comes as 73% of organisations report having been audited in the past three years.

Under Oracle’s Java SE Universal Subscription model, licensing costs are calculated based on total employee count, regardless of actual Java usage across the organisation.

A single unlicensed instance can trigger a demand to license the entire organisation, often accompanied by multi-year back-usage fees charged at list price.

That exposure extends beyond current employees, with audits potentially requiring organisations to license every contractor and part-time worker in addition to full-time staff.

The whitepaper outlines four paths forward for organisations currently running Oracle Java without a paid license, giving decision-makers a structured framework for evaluating their options.

Azul also cautions that switching to unsupported OpenJDK is not a straightforward fix, as it may not protect against back-usage fees tied to historical downloads of Oracle Java.

Unsupported OpenJDK also introduces its own risks, including patch stability concerns and regulatory exposure under compliance frameworks such as PCI-DSS 4.0 and DORA.

For organisations considering migration, Azul notes that OpenJDK is fully interchangeable with Oracle Java and requires no code changes or re-architecture to implement.

Commercially supported OpenJDK providers offer migration methodology, automated tooling, and expertise designed to reduce the time and resources required for transition.

Azul describes itself as the trusted leader in enterprise Java for the AI and cloud-first world, with its platform powering mission-critical systems for 36% of the Fortune 100.

The company also counts 50% of the Forbes Top Ten World’s Most Valuable Brands and the world’s top 10 financial trading companies among its customers.

The full whitepaper is available for download at azul.com/oracle-java-uncovered for organisations seeking to assess their current exposure and evaluate next steps.

The UK’s Competition and Markets Authority (CMA) is taking a closer look at Microsoft’s business software empire, launching a strategic market status investigation into the company’s ecosystem.

The probe, which is the fourth since the UK’s digital markets competition regime came into force last year, will determine whether Microsoft should be designated as having strategic market status, which would allow the CMA to implement interventions to support competition.

In March, the CMA announced that the investigation was coming. The regulator was concerned that Microsoft’s software licensing practices were reducing competition in the cloud.

In the most recent announcement, the CMA said it had “heard that UK customers may not always be able to effectively combine software from Microsoft with that of other providers, limiting their ability to get access to the best products at the most competitive prices.”

Microsoft is no stranger to regulatory friction. In 2025, it described calls from AWS and Google for the UK competition regulator to “intervene and constrain the price” it charges customers to run wares on those rivals’ cloud platforms as “extraordinary and unprecedented.”

Two year prior, Google branded Microsoft’s cloud software licensing a “tax” paid by customers as a penalty for not running Microsoft software on Azure infrastructure. It claims that Microsoft charges up to four times more, for example, to run Windows Server on GCP. AWS has previously moaned about this too.

As well as assessing whether Microsoft is using its position to limit customer choice, the CMA investigation “includes looking at how AI competitors are able to integrate with Microsoft’s business software, giving customers access to AI software across suppliers to best suit their needs.”

Microsoft is pushing Copilot AI into as many Microsoft 365 subscriptions as it can, even creating a new tier, E7, aimed specifically at AI services.

In a statement, Nicky Stewart, senior advisor to the Open Cloud Coalition – a trade association Microsoft previously dismissed as a Google lobby group – said:

“This investigation needs to be both rapid and conclusive. It must address Microsoft’s unfair licensing practices once and for all, giving the UK cloud market a level playing field and the confidence to innovate and invest for the long term.”

Readers should not expect results anytime soon. It took 21 months for the CMA to publish the results of an investigation into the UK cloud services market, in which it said Microsoft and AWS were using their dominance to harm UK cloud customers. It claimed Microsoft, for example, could have charged UK enterprise customers £500 million more annually to run its wares in AWS and Google clouds than they’d have paid to run them in Azure.

A key concern from that investigation – whether Microsoft’s software licensing practices were reducing competition in cloud services – has informed this one.

This latest inquiry must be completed within nine months, and a decision on designating Microsoft with SMS is scheduled to be reached by February 2027.

For its part, a Microsoft spokesperson said “We are committed to working quickly and constructively with the CMA to facilitate its review of the business software market.”

The investigation will be wide-ranging, encompassing productivity applications, operating systems, databases, and security software.

Sarah Cardell, Chief Executive of the CMA, said, “Our aim is to understand how these markets are developing, Microsoft’s position within them and to consider what, if any, targeted action may be needed to ensure UK organisations can benefit from choice, innovation and competitive prices.”

Authorities in the US, Europe, Brazil, South Africa and Japan are also closely monitoring Microsoft’s licensing policies.

A proposed class action lawsuit alleges that TeamViewer has misleadingly sold “perpetual” licenses for its remote computer access software, given that it has withdrawn internet-based connectivity for legacy versions, leaving users with a “materially diminished” product unless they buy it again or upgrade their subscription.

The 17-page lawsuit contends that TeamViewer, which offers remote-from-anywhere access to computers outside of a user’s network without complex network configuration, sold “perpetual” licenses for TeamViewer Versions 11 and 12 that were later cut off from the software’s servers and network, stripping the product of its core remote-access functionality.

According to the class action lawsuit, TeamViewer’s “perpetual” licenses were sold on the basis that, after one “substantial” upfront payment, customers would have continued access to remote-access functionality through TeamViewer-controlled servers. Per the case, TeamViewer enables device identity, authentication, session negotiation, and NAT/firewall traversal for remote sessions over an internet connection, allowing users to connect to devices outside of their Local Area Network (LAN). Each of these services required an ongoing connection to TeamViewer’s servers and infrastructure, the suit stresses.

The filing contends that after shifting toward a subscription-based model, TeamViewer unfairly implemented an “end-of-support” action that unilaterally denied TeamViewer Versions 11 and 12 access to its servers and network, rendering the software “unable to perform its essential intended use.” As a result, consumers with “perpetual” licenses have been left with LAN-only connectivity and the “resulting pressure” of being unable to work remotely until they purchase another subscription or upgrade.

The lawsuit says that TeamViewer’s decision to remove legacy versions of its software from its network ecosystem is more egregious than simply ending updates or customer support, given that consumers are left with LAN-only connectivity despite paying for remote-access functionality, the “defining” feature of the product.

“TeamViewer’s attempt to characterise the resulting ‘LAN-only’ connectivity as a continued benefit is misleading and commercially unreasonable,” the suit argues.

Consumers widely understood “perpetual” to mean more than simply the retention of the right to “run a local executable,” and that continued remote-access use was the “essential” purpose of the license, per the case.

As the complaint tells it, TeamViewer has failed to provide consumers with meaningful compensation—such as partial refunds or credits—to reimburse them for the license’s premium price.

The plaintiff purchased TeamViewer based on the representation that the perpetual license was a “paid-up” alternative to a subscription service, and paid a total of $2,799 for the software license. The complaint relays that when the plaintiff made his purchase, he did not expect that TeamViewer would later “extinguish” the software’s intended use by removing access to its servers.

The TeamViewer class action lawsuit seeks to cover all individuals and entities in the United States who purchased a perpetual license to TeamViewer Version 11 or Version 12.

The Coalition for Fair Software Licensing has published research showing that US workers reckon Microsoft is using its productivity tools to lock their employers into the company’s AI services.

The survey data of more than 1,000 workers – out a day before the release of Microsoft’s E7 AI bundle – found that three-quarters believed Microsoft was using its dominance in productivity software to push AI. More than half (57 percent) opposed their employer buying Microsoft’s E7 bundle.

Only a third of workers questioned said they preferred Microsoft as a vendor, while 78 percent reported they could do their jobs just as well with another vendor’s AI tool.

Perhaps that other tool is Google Gemini. Though the survey makes for difficult reading for Microsoft and Copilot enthusiasts, it also opens a new front in the war for productivity hearts and minds. Google has no official affiliation with the survey or the Coalition for Fair Software Licensing – but Microsoft, for one, has its suspicions.

In a 2024 blog entitled “Google’s shadow campaigns,” Rima Alaily, Microsoft’s general counsel for Infrastructure Legal Affairs, wrote, “We understand Google is a main funder of the US-based Coalition for Fair Software Licensing.”

The Coalition for Fair Software Licensing were asked about its ties with Google. A spokesperson said, “While the Coalition does not disclose our membership, our members span a cross-section of key industries, including healthcare companies, financial services businesses, as well as cloud and cybersecurity providers – each one has experienced or been exposed to anticompetitive and abusive software licensing practices in the cloud.”

Another source grumbled about Gemini, saying there is a risk that “Google is deploying the same playbook as when they were monopolising search.”

Google were asked for comment, but the company was unable to provide a statement before publication. Other than an acknowledgement of receipt, Microsoft has also not responded.

Ryan Triplette, executive director of the Coalition for Fair Software Licensing, said, “Microsoft’s decision to launch E7 on May Day is no coincidence. It should send a clear distress signal for any organisation already locked into the Microsoft ecosystem. For years, customers have borne the cost of that lock-in, paying a premium not for innovation, but simply for the ability to maintain flexibility. E7 is the latest extension of that model, and the reaction from workers underscores a growing reality: the cost is not justified.

“Despite Microsoft facing mounting regulatory scrutiny over its anticompetitive behaviour, we fully expect the company to deploy every tool in its playbook to force existing customers into this new bundle. Regulators on both sides of the Atlantic should be watching closely and be poised to act quickly to protect customers.”

Microsoft is dominant in the office productivity space. Google Workspace has claimed a few high-profile scalps over the years, but some, such as European aerospace megcorp Airbus, have found the Microsoft habit a hard one to kick.

It is unsurprising, then, that critics have rung alarm bells over Microsoft pushing AI technology into enterprises that have already bought into its productivity ecosystem. Copilot has yet to deliver the productivity gains promised by evangelists, but Microsoft is heavily invested in the tech and determined it will be a success.

The survey data reflects wider unease among workers over AI tools being promoted through subscriptions like E7, and anxiety, perhaps, about an agentic future and what it means for their jobs. What it does not capture, however, is the thinking of those who will actually make the decisions: whether Microsoft holds its grip on office productivity into the AI age, or loses its crown to a rival.

For decades, enterprise software has acted as a digital filing cabinet or system of record where human workers painstakingly log the daily operations of a business. Now, Oracle wants to flip that dynamic, turning its software into an autonomous engine that does the work itself.

The move hinges on what the tech industry is calling agentic artificial intelligence (AI), where software agents with the ability to reason and collaborate can execute multi-step tasks with minimal human intervention.

Speaking on the sidelines of Oracle AI World Tour Singapore, Rondy Ng, Oracle’s executive vice-president for applications development, noted that enterprise resource planning (ERP) systems are evolving from passive repositories of data into autonomous systems of outcome that execute tasks based on high-level business goals.

However, Ng made it clear that Oracle’s latest AI innovations are exclusively reserved for its software-as-a-service (SaaS) products, such as Oracle Fusion, which is used by about 70% of its applications’ customer base. Legacy, on-premise product lines remain in maintenance mode.

“When people deployed those legacy applications from the past, they were heterogeneous,” he said. “They were not standard processes.

“If you have data demarcated in different ways, you can build agents to recognise all the differences, but the effort of doing that and the likelihood of making mistakes and hallucinations are higher.

“But if you’re on a relatively clean slate, you get faster results, better accuracy and more automation,” added Ng. “Our strategy is for people to go to SaaS. When you’re on SaaS, you can deploy AI much more efficiently.”

A UK Competition Appeals Tribunal (CAT) has dismissed Microsoft’s objections to a collective action lawsuit brought by UK-based cloud licensees, clearing the way for trial.

The case seeks compensation for approximately 59,000 businesses and organisations over Microsoft’s pricing of Windows Server on Azure versus competing cloud platforms including AWS and Google Cloud – allegations that Microsoft charged less for the software on its own platform than on rivals’. If Microsoft loses, it could face liability of up to £2 billion (c $2.7 billion).

The CAT granted a Collective Proceedings Order (CPO) on an opt-out basis, and said in its judgement that the claim “comfortably passes” the reasonable prospect of success threshold. The CPO – expected to be published within weeks – will set a deadline for businesses to opt out, and may include directions for when hearings begin.

Microsoft’s protestations concerned funding and the merits of the case.

Lead claimant Dr Maria Luisa Stasi called the ruling “an important moment for thousands of organisations impacted by Microsoft’s conduct.”

She added: “For years, Microsoft’s practices have had real financial impact on both public and private organisations. I’m now looking forward to preparing for trial and getting their money back on their behalf.”

A spokesperson for Microsoft said: “We will pursue an appeal of the Tribunal’s decision because it failed to follow recent precedent from the Supreme Court on class action certifications. We also dispute the underlying allegations by the class representative, and today’s decision makes no final determination on those claims.”

The case, filed in December 2024, is one of several legal headaches for Microsoft in the UK. The company is separately appealing a CAT ruling over secondhand software sales in a claim brought by reseller ValueLicensing.

Jonathan Horley, boss at ValueLicensing, said of the class action case heading to trial: “However it pans out, it is very good that MS are being held to account over their strategic move to a subscription model.

“Over the last 15 years, in both the desktop and datacenter environments, VL believes that Microsoft has abused its dominant position to achieve that aim. I believe the Stasi and Wolfson claims are manifestations of that.”

Cloud provider Civo also welcomed the development. CEO Mark Boost said: “Ensuring a level playing field for all providers is essential to fostering innovation, expanding choice, and delivering the best outcomes for customers.”

Microsoft’s alleged licensing practices have drawn scrutiny across Europe and further afield – in 2024, the company settled with EU cloud vendor group CISPE with a payout and commitments to change its practices. CISPE had no comment to make on this latest development. In the same year, Google filed a complaint with the European Commission’s anti-trust team over the matter.

The FTC is examining if Microsoft’s cloud clout crosses the line, and authorities in Japan are investigating if the vendor has violated anti-monopoly laws.

Google and AWS have not commented on the CAT licensing ruling, which sends the case to trial.