The licence under which Sun would be publishing the open source Java code would be catering to open source community or enterprises but would not be able to satisfy both the sides. Generally open source community requests that the code be released under the GPL which requires that developers publish the source code of all the changes made by them.

Stephen O'Grady, Analyst, RedMonk

The biggest challenge is finding something that is going to balance commercial interests with the desires of the open source community.

On the other hand enterprises generally prefer licences such as Apache, BSD or CDDL which enables them to mix the code with proprietary software without requiring publishing the code. However these licenses are incompatible with the GPL which would prevent the inclusion of Sun's open source Java in Linux kernel. Sun might go in for a dual license which would allow users to choose between an open source and commercial license but this might not be the right solution as a commercial license would make it difficult for enterprises to build on top Java as it would require them to work through Sun. As of now Sun has not divulged under which licence it would be releasing the Java code.