IT managers: Keep software licensing simple

Software licensing in a world where multi-core processors and virtualization are expected to be the norm is raising a whole new set of challenges for IT managers.

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IT managers sorting out ways to license new technologies, such as multi-core processors or virtualized servers, say that keeping the software licensing models simple is a step in the right direction.

The big players are starting to weigh in with their own approaches to licensing. Microsoft has already said it will license software on a per-processor basis. IBM recently said it will assign a measurement to processors called processor value units. The first chip that will test this model is a quad-core processor from Intel Corp., expected out later this year.

For chips already out, IBM said it will take the number of existing software licenses and multiply that number by 100 to determine a new measurement. For example, each core on an X86 dual-core system previously would have one license. To convert this to processor value units, customers need to multiply the 0.5 per-processor license by the conversion factor of 100. The new value unit is 50.

The idea behind using a conversion factor is to eliminate fractional licenses and simplify the task of determining the number of licenses required on a server, according to IBM.

Andy Lees, a corporate vice president in Microsoft's server and tools marketing group, said he believes IBM's new licensing puts customers at a disadvantage. Each chip manufacturer makes a different set of chips, and there are different ratios that a customer would pay per core. Microsoft's per processor model is the same regardless of where the server originates, Lees said.

Moving from a multi-core to a single-core processor licensing model is just following Moore's law, said Lees. Charging per core on a multi-core box would only stifle adoption of this technology, he said.

What these vendors are trying to do is preserve the value of their software in light of what's happening with the underlying hardware while trying to stay cost competitive, said Amy Konary. Konary is program director of software licensing at IDC, a Framingham, Mass.-based market research firm.

"This means having customer-friendly, simple models and price-competitive offerings," Konary said. "No matter what policy they come out with, the market will bear what the market will bear. When it comes down to what users will pay, the licensing framework is one thing, but the actual price of software may be another."

Konary said IBM's licensing plan positions the company to charge for grid computing and virtualization, which IBM has not yet publicly discussed.

IT managers, typically, may not negotiate software licenses as part of their job descriptions, but product choice occasionally comes down to licensing simplicity.

"I just want it to be simple, and I don't want to have to calculate what my licenses will be," said Jamey Vester, an administrator at Subaru of Indiana Automotive Inc. in Lafayette, Ind.

"One of the few Windows servers we run is SQL Server, and we run it because it's licensed per-processor. It doesn't matter if it's dual core," said Joseph Foran, IT director at FSW, a Bridgeport, Conn.-based nonprofit that specializes in providing family and community health services.

"Microsoft hasn't done much in the way of innovating, but it has in terms of simplifying," Foran said. "[What IBM is doing] sounds like an overabundance of complexity."

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