Dual-core Processors Challenge Licensing Models

ffub writes "Changes in hardware (such as dual-core processors and virtualisation) are making software licensing increasingly difficult for software firms. Companies still prefer the per-seat one-off license, while subscription models are favoured with software firms. But neither model reflects well the way software is used these days. The Economist looks at the situation and briefly touches on how Open Source could benefit from the muddle."

Comments

Maybe

[BHearsum]

Maybe this will get rid of licensing models that are 'per cpu'. I've never understood the logic in charging per CPU, anyone care to explain? One computer, one license. Or even better, no licenses.

Re:Maybe

[inode_buddha]

I would bet that the "per CPU" license model dates back to a time when CPU's were much more expensive; it could reasonably be assumed that there would be many users using one CPU. In other words, the business model is a couple of decades behind the technology.

Re:Maybe

[S.O.B.]

Servers come in configurations of single up to 8 or even 16-way processors. Is it fair that a company with a server that has a single processor serving 100 users pays the same as a company that has a server with an 8-way processor serving 1000 users.

Per CPU licensing was a simple metric that allowed software companies to scale their pricing so that it was fair to both the entry level and high end customers.

As the article points out multi core processors are the processor companies' way of increasing performance without having to increase the clock speed and therefore keep temperatures down. Since software companies didn't care about the performance of a given processor, just how many you had, they shouldn't arbitrarily change the licensing model.

At the company I work for I know that because of the per CPU model we intentionally bought servers with fewer faster processors. Even though in most cases those servers were more expensive than machines with more processors the amount we saved on licensing costs more than made up for the additional hardware costs.

I suspect that in the end they'll end up with more of a performance based model similar to the MIP based licensing model on mainframes.

Database Licensing and the Web

[inmate]

This won't be the first time that licensing has faced such a crises.

In the early days of the web, I worked on a web-based project which connected to a MS SQL-Server database. The licensing issue was very confusing since the information in the database would be made available to anyone who came to site (and we expected a few hundred regular users), but technically everything would be accessed by through only one account (the webserver!).

I called the local MS office and they confirmed that we only need one licence for this model.
Based on this information, we rewrote a major internal application to be entirely browser based - and then dropped all our seat licences bar one.

Needless to say, MS had a absolute fit!

About a year later we received an incredibly confusing document outlining license-requirements for internet and intranet applications.

Re:Database Licensing and the Web

[blowdart]

There's actually a specific internet connection license for that sort of setup, however it's interesting to note that Microsoft have said, for licensing purposes, dual core CPUs count as a single cpu.

Compare to Oracle; if you buy a licence for a dual core machine, the second core is only counted as .75 of a CPU, as is each succeeding core. However Oracle rounds all numbers up, so .75 = one for licensing, and 1.75 = two, roughly the same cost as if you bought two licences. And so on. It's only a saving if you have 3 dual core cpus or more.

Article mentions virtual servers

[putko]

I had not thought about the problem of virtual servers.

E.g. suppose I have a big-ass mainframe that emulates a few PCs, just to run Excel now and then (for legacy reasons). Once a month, we reconfigure the mainframe just for a batch job, so that some of its resources are used to simulate 10 PCs.

How do you price that? A mainframe license? 10 separate PC licenses? What about the fact that I'm only doing it now and then, and not using it regularly (8-10 hours a day)?

I just wish the article had used the term "price discrimination" -- that really explains it all.

Q: How much does it cost?
A: "How much ya got?"

We've heard this before...

[Zweideutig]

I know we have heard about this quite awhile ago on Slashdot, when Oracle wanted to consider a dual core CPU two processors I think companies like Oracle will be forced to think of dual core CPUs as simply one CPU that handles multiple threads well, especially with dual core CPUs not only coming from the Intel side, but also from IBM If I remember correctly Oracle found it difficult to determine the difference between dualcore and two CPUs. In the end, everyone will buy dual core, for the same reason everyone buys LCD monitors (it is seen as better, even if maybe it isn't.) Software companies will be forced to bend, hardware companies won't have to, because consumers are not going to put up with paying twice as much for what appears (on the outside) as one CPU. Should I be charged twice the parking fee because my 2001 Excursion has twice as many cylinders as the car beside it? I don't think so.

Robber Barons

[forq]

The software industry has gotten away with robbery for too long. Year over year they astound us with their skyrocketing costs, and as computing complexity goes up, they find more and more excuses to not deliver the support you're paying for. "We cannot support you because of X." X being any reason they can find. Upgrades, new hardware they don't have in their support matrix, virtualization. Whatever the reason, the very first order of business for those support folks when you call for help is to find a reason to not support you. And now they want more money. To pay the outsourced first level support folks that know all about how to determine if you're unsupportable, and nothing about how to support the products.

Ridiculous.

Per CPU licensing makes no sense anyway..

[wfberg]

Per CPU licensing makes no sense anyway. It gives no indication how heavily an application is used, or how important it is to a business. For databases, it would make more sense to have a license for X thousand transactions, or Y amount of data. After all, databases are used for doing transactions and storing data. (Don't let Oracle get wind of this idea though, I've got an Oracle database that's more than 1GB in size but compresses down to 30MB! This pricing model will be the ideal excuse for them to take up even more disk space..)

The reason licenses are tied to hardware or to seats is probably because it's easy to justify these as a "cost of doing business" to suits. While projects usually have the greatest difficulty getting an OK for money to go towards programmers, expensive hardware is purchased willy-nilly, on the basis of "well, now we've got this application, we need to run it, or else the money we spent on programming it is wasted!". So tying your database license to CPUs makes more of an afterthought. (Just like performance, scaleability and actual volumes are an afterthought).

The same goes for seats; you just HAVE to license one copy of Microsoft Office or an OS or a database for every employee, otherwise you're paying (some) employees for basically standing around! Then, to recover costs, you make sure they have very little access to things like notepads, pens, or copying machines, since those dimes add up, don't you know?

Call me a cynical bastard if you will..