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Microsoft Won't Charge More for Multicore Licenses

Posted by timothy on from the great-order-up-a-few-dozen-cores dept.

esimp writes "According to technewsworld: 'As servers with dual-core processors come closer to hitting the market, Microsoft announced today it will not base its per-processor software licensing charges on the number of cores in a chip, sticking to the traditional price per processor, regardless of its number of cores." Update: 10/20 00:37 GMT by T : One of the identical links to TechNewsWorld's story has now been deleted.

2 of 234 comments (clear)

  1. Will licensing costs remain the same? by ffattizzi · · Score: 5, Interesting

    While this seems like good news, I suspect after multi core server become common (or sooner) it will cost more per processor to license these applications.

    -Frank

  2. Marketing Fluff by null+etc. · · Score: 5, Interesting
    I just ran the linked news article through my Marketing Cut-N-Paste Detector(TM), and have displayed the results below. All phrases in bold are determined to have been directly cut-n-paste from previous marketing articles.

    ... Analysts have warned that software makers might license their server products at double the price for double the number of cores, but many have also indicated that software companies have little to gain from multicore price increases.

    ... Although some vendors have hinted they may charge more for software licensing on multicore processors, most have moved closer to Microsoft's announced stance, which seeks to maintain the status quo without charging more for multicores.

    "Microsoft software that is currently licensed on a per-processor model will continue to be licensed per processor, not per core, for hardware that contains dual-core and multicore processors," the company said in a statement.

    Microsoft said its multicore licensing decision is aimed at driving higher volume and better value with the advent of dual-core and multicore server processors from both AMD (NYSE: AMD) and Intel (Nasdaq: INTC) , which are expected in hardware beginning next year.

    ... "Our customers want to understand software costs as they evaluate the return on investment of new technologies, such as multicore processors," said Microsoft vice president of licensing and pricing Brent Callinicos in a statement.

    ... According to Gartner analyst Martin Reynolds, the fear has been that software vendors would double their prices for dual-core processor coverage, creating big cost jumps for enterprise customers. Gartner recommends customers attempt to negotiate software licenses that count a single-chip device as one processor, regardless of how many cores it carries.

    While some vendors, including IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL) , have signaled they might charge more in licensing for dual-core and multicore products, Microsoft confirmed what many analysts had predicted -- that the addition of processor cores was by no means an opportunity for software vendors.

    Yankee Group senior analyst Laura DiDio told TechNewsWorld that Microsoft was making a proactive move to address the issue, but was also signaling to its customers that it is not a hardware vendor and could not lower software prices along with the dip in hardware costs that comes with the efficiency of multicore chips.

    DiDio said that while customers might benefit from more efficient processors and interaction with the software, they will pay the same rate they've been paying to license Microsoft products with the new hardware.

    "This multicore technology really illustrates the dichotomy between the rapid advancement of hardware capability, which is in turn making issues with how software companies license the technology," DiDio said.

    [Editor's note: I admit that the previous three paragraphs come from an alternate universe in which everyone speaks marketing lingo, and understands each other.]

    Referring to the complexity of per-processor licensing, even without the addition of dual-core technology, DiDio said software makers do not want to be seen as raising their prices, for fear of losing customers.

    Nevertheless, software vendors have proceeded cautiously on the core question, with rivals IBM, Oracle, Sun, Microsoft and others waiting to see how the others approach the issue, partly to learn what works and partly to have the opportunity to counter, according to DiDio.

    She said IBM is in a different situation since it makes money not only from software and services but also from hardware.