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Microsoft Will Squeeze Datacenters On Price of Windows Server
Nerval's Lobster writes "Microsoft plans to raise the price of the Datacenter edition of the upcoming R2 release of Windows Server 2012 by 28 percent, adding to what analysts call a record number of price increases for enterprise software products from Redmond. According to licensing data sheets available for download from the Windows Server 2012 R2 Website (PDF), the price of a single license of Windows Server 2012 R2 Datacenter will be $6,155, compared to $4,809 today—plus the cost of a Client Access Licenses for every user or device connecting to the server. News of the increase was posted yesterday by datacenter virtualization and security specialist Aidan Finn, a six-time Microsoft MVP who works for Dublin-based value added reseller MicroWarehouse Ltd. and has done work for clients including Amdahl, Fujitsu and Barclays. The increase caps off a year filled with a record number of price increases for Microsoft enterprise software, according to a Tweet yesterday from Microsoft software licensing analyst Paul DeGroot of Pica Communications."
RedHat should see a nice increase in business because of this.
it's almost as if you're trying to get people to use something else.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
Datacentre allows unlimited virtualization and consolidation ratios are climbing.
We run around 300 Windows VMs on 16 CPUs, that was a major saving over Windows Server Enterprise Licenses.
Still, the pain.
Jason.
MS should increase all of their licensing costs by 500-1000% and they can pull a Nortel while they flush themselves down the toilet.
Good, even smaller chances that someone will buy it.
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#\ @ ? Colonize Mars
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There are alternatives.
I must, I must increase my going bust
Bigger Processors, More RAM & fewer licenses. Remember, when you run a datacenter edition, all your VM's are automagically licensed. Nowhere does this mention a versus comparison of licensing between VMware, Xen, etc.
Haven't searched for a end-to-end supported KVM solution recently....
They've got to pay for all of those Slates they have stuck in the warehouse.
Linux? Debian, maybe? Though I'm not sure what the preferred 'server' distro would be... Or maybe unix, perhaps FreeBSD? I know that's wildly popular as a server OS, but I think Debian is much easier to use than any unix variant I've yet tried. There's plenty to choose from. I guess the question would be how the costs to change over compare to the costs to just keep Windows Server.
Forgive me, as I've never run a high volume server before. Just small ones that I've not used far beyond basic personal stuff.
should do yearly increases of $500 over a couple years, then no one will notice
There is a significant install base of Windows in datacenters? Who knew...
If you want news from today, you have to come back tomorrow.
These dramatic price hikes look like Microsoft is working to stem the tide of massive losses with increased revenue in their core product domains. They are running out of options as each new offering falls flat on its face over and over again. I wouldn't be surprised if there is some significant trimming of "non-essential" personnel in the next few years to further boost the quarterly profits.
I am becoming gerund, destroyer of verbs.
Princess Leia: Governor Balmer, I should have expected to find you holding Gates' leash. I recognized your foul stench when I was brought on board.
Governor Balmer: Charming to the last. You don't know how hard I found it, signing the order to terminate your license.
Princess Leia: I'm surprised that you had the courage to take the responsibility yourself.
Governor Balmer: Princess Leia, before your execution, I'd like you to join me for a ceremony that will make this game console operational. No IT department will dare oppose the Emperor now.
Princess Leia: The more you tighten your grip, Balmer, the more data centers will slip through your fingers.
Governor Balmer: Not after we demonstrate the capabilities of Windows 8!
You were always a copy of someone else's idea.
Thank you Microsoft. This makes implementing enterprise strategy so much easier. So let's see.. in the past year we've ditched Microsoft CRM completely. We got rid of 2 SQL Server instances. We will purchase SQL 2012, but with only half the CAL's. These price increases make it so much easier to consider other options.
----- obSig
We just left Red Hat - converted the entire datacenter from an OpenLDAP/samba infrastructure on Red Hat 5 & 5 to an AD/windows environment - because Red Hat couldn't (or more acurately wouldn't) meet Microsoft's pricing. The fact that HyperV proved to be fantastically more stable and capable than RHEVM (and RHEVM had Active Directory dependencies) didn't help the situation any, but it was price discrepancy that really did it.
We had to replace hardware anyway, so we priced out new software while we were at it. Microsoft won on value for the dollar, crushing Red Hat (and also VMware). I personally prefer Open Source so I'm kind of bitter about it, but I had to do what was best for the company in order to keep our staff gainfully employed. That's what companies are for, to support people.
My licensing costs. Let's see:
CentOS 6 - $0.00
Apache - $0.00
MariaDB - $0.00
PHP - $0.00
GNU C++ - $0.00
TOTAL -- $0.00
Plus number of hours spent auditing licensing: ZERO
Now let's look at my development tools:XCode, SSH, Firefox, Chrome, VIM, and the command line. For an additional zero dollars.
But the best bit is that even if MS said, "Dude you are so wonderful that we will now give you an unlimited license to every product we have completely for free for life." I wouldn't even crack the film wrap on the packaging. It is not out of some religious hatred of MS but that the products I use match my needs perfectly. So for me at least to switch back to MS would be to make my products and productivity worse.
MS is just covering losses on their Surface, it shouldn't be a huge surprise. ;-)
Awk! Pieces of eight. Pieces of eight. Pieces of seven... ERROR: General Protection Fault. [Paroty Error.]
What is the news here, the original Server 2012 is the same price.
And wikipedia, claims R2 adds the following features:
- Automated Tiering: Storage Spaces stores most frequently accessed files on fastest physical media
- Deduplication for VHD: Reduces the storage space for VHD files with largely similar contents by storing the similar contents only once.
- Windows PowerShell v4, which now includes a Desired State Configuration (DSC) feature
- Integrated Office365 support
- UEFI-based virtual machines.
- Upgrades from driver emulators to synthetic hardware drivers to minimize legacy support.
- Faster VM deployment (approximately half the time).
Aren't those features worth something extra? Anybody who still wants the older version can pay less, so what's the big deal here?
Who cares? Amazon will simply increase prices for EC2. In fact, they guarantee it!
If Microsoft or Red Hat chooses to increase the license fees that it charges for Windows or Red Hat Enterprise Linux, we may correspondingly increase the per-hour usage rate for previously purchased Reserved Instances with Windows or Red Hat Enterprise Linux.
So, what, maybe another penny per hour? I couldn't possibly care less.
I'm at a large company with a lot of servers and the increase is still less than it would cost to change to any other system. Just the cost of hiring someone to work on a Linux version would far outweigh any Windows price increase.
I run a datacentre of roughly 20-25 servers. Traditionally they were all Windows servers. The Exchange servers and Active Directory and file shares are still Windows based due to simplicity in management however all the application servers have been replaced with Linux. My network management servers (Nagios) are now linux, as are the Tomcat servers, backup servers and various others. Ive gone to Linux for web and spam filtering as well. I would say I have moved up to roughly 50/50 Windows/Linux mix and saved a large amount in Operational costs. The administrative people have noticed I've saved on operational costs and have been able to reuse those funds for some projects instead of throwing money on licensing. What still kills me is the Exchange mailbox licensing. I create a rarely used mailbox for a photo copier and it will cost me an exchange license. Symantec then charged roughly 35 dollars per mailbox per year for premium antispam...brutal.... Our web filter was costing us roughly $1500 a year for 100 concurrent users. I saved about $5000 per year on antispam alone...
Sure, it looks expensive, but Microsoft is throwing in a Surface RT I believe.
Woot!
Problem is most people that are stuck using windows will just have to pony up ( and pass along the increase to their customers ) as they are locked in.
Lots of apps *require* some sort of windows products and its normally not trivial to change, at least in the real world. I do realize that your mothers basement its not hard to just say 'change to xyz'.
---- Booth was a patriot ----
The license fees for running Linux have effectively doubled every year since it came out.
Thank you for not fitting in my IT budget in any possible way whatsoever. Saves me a lot of time doing cost analysis of all possible options: MS options don't fit in budget even without support hours, so it will have to be an open-source solution, no matter how many hours I may spend on it. I like a back and white world, where I can just ignore grey.
Are they insane? Six grand for a server OS that literally can be replicated with any Linux distribution and a few things like SAMBA, Rsnapshot, etc? So long as it LOOKS like a Windows server to the user community, they don't care.
And so the great Microsoft death-spiral begins.
You're a slick one Steve, taking a page from the USPS playbook by increasing fees to offset the exodus of business.
Windows Server is the only thing making them money now. They are trying to make up for the money they are losing on tablets and will lose on Xbox 180
Software companies are in a position to be extremely abusive, because it is so difficult to change to new software.
Adobe is doing the same thing: Adobe kills Creative Suite, goes subscription-only. You will no longer be allowed to have Adobe CS software on your own computer. NSA magnet, and far more expensive. As you are designing a new web site, the NSA will be viewing what you are doing. Or, of course, people who work for Adobe.
For most businesses, even small businesses, the issue isn't the cost of Windows Datacenter licenses and CALs. They pay far more for people to administer the thing. One fully loaded dual-socket server can serve an armada of Windows Server instances (any version) with the license included, Linux servers as well, and petabytes of storage. You just need to load up on the RAM and flash storage the instance images are stored on to get around the I/O bottleneck. They're paying more for the software that enables specific services (database, backup, security, CMS, cloud management, dashboards, email, ad infinitum) to run in these instances. Before you need more than three of these tin boxes (and associated Windows Datacenter licenses) for WAN distributed cluster failover you're a Fortune 1000 company, or you are selling online services and using Linux and probably AWS anyway. One box configured correctly literally has the grunt now to service thousands of end users for customary services like file/print, enpoint management, LOB apps. Most actually pay every license twice just to ensure they don't get publicly shamed by the BSA in an audit, that's how much they care about the price.
The real issue is that Windows server instances are not very good at servicing the currently shifting mix of endpoint devices. Windows Server is notoriously poor at recognizing the existence of the non-Windows devices that make up 80% of endpoint sales these days. At the other 20% they're great! Fortunately in the painful extraction from XP/IE6/ActiveX/MSJAVA most learned their lesson and demanded standard web browser based Line Of Business apps and Linux web server instances have abundant packages and connectivity to get the job done so delivering the required business utility to these endpoints is not a problem.
Microsoft's position has been that these new endpoints are toys. They don't even have Active Directory or IE9 for goshsakes, and Office won't run. So they're not worth supporting. They could come around to the opposite point of view and re-engineer their services for "bring any endpoint" but that bites them on the other end by encouraging people to deploy these devices in preference to endpoints running their own client OS, weakening the "synergy" of their web of codependencies. It also blunts the patent licensing bludgeon they have been using to prevent progress in many ways as these non-Windows endpoints have pretty much worked around their patents.
They're being euchred on the patent thing too. For years they used MPEG-LA to halt progress in video: "You can't do video without taking a license". But then Google bought ON2 - maker of Microsoft's own CODEC and Flash's as well, and Motorola Mobility, which is a bigger dog with MPEG-LA than them, so now they can't even ship an OS that can play a DVD without paying Google money. This is why Media Center is a download app suite now, rather than an OS version shipping on devices. Google is pushing their own better free and open CODEC that has a free patent pledge. ActiveSync, the patented proprietary protocol they used to prevent push email and calendaring to mobile devices is on the ropes: they're in the unenviable position of begging Google to implement it so their own Windows Phone devices can sync with Google services rather than demanding that no devices or services can implement it without paying them a fee. And on and on.
I really think they've been strategically outflanked on every other front. Price though? I don't think that's an issue. I think they could double the price of Datacenter and get away with it.
BTW: If I had to pick a nit with Windows Datacenter licensing it is that you cannot fail a Windows Server instance over from one physical Windows Datacenter server to another and then fail it back in under 30 days without violating the license of the Windows Server instance. At least that was the case last time I checked. Clearly that's a licensing oversight and unlikely to be enforced, but the sort of nit that gives license compliance people fits. Maybe some fine Windows licensing blackbelt will correct me on this in reply, with a proper citation.
Help stamp out iliturcy.
Replicated with Linux, a few things like samba, and _a datacenter support contract_
The gap in price gets much lower when you compare apples to apples. If you just want a small cluster of windows servers for your business, you can get that for almost free (included support!)
Where I work is a Microsoft shop. Almost all of the servers are Microsoft with the emphasis on keeping it that way. If I was told to convert 50% my machines over to Linux I could do it pretty quickly. Now will this price increase make this happen?
Actually it hasn't tripled. 200-2003 WAS a bad time for them compared to earlier years, but there's no tripling of profit.
In that same ten years, Google's profit actually HAS increased 100X and Apple's up 586X over the same period.
So the the score is:
Microsoft 2.2
Google 100.0
Apple 586.0
Son, please tell me you do not work for a for profit company?
Let me explain it for you. Lets say there is a race and the MS Soapbox Express is hurtling along faster and faster every moment. Sounds like they are doing really well. Problem is that the race is on a downward sloping hill and everyone else brought engines. The fate of our beloved soapbox racer is suddenly not looking good.
Now, son, do you understand how increasing profit is irrelevant to the measure of success if not compared to the competition in a growing market?
"There is no online software."
That's not what everyone is saying. Read the comments to this article.
Are they insane? Six grand for a server OS that literally can be replicated with any Linux distribution and a few things like SAMBA, Rsnapshot, etc? So long as it LOOKS like a Windows server to the user community, they don't care.
I take it you have not seen an Oracle License for Solaris have you?
They go for up to $100,000 as the database is part of the deal whether you need it or not!
$6,000 is laughable cheap as the real cost comes when Samba doesn't work for a 3,000 user environment where shit wont break because of a Windows Update to the clients or if you need virtualization.
VSPhere last time I looked was $8000+. So $6,000 is -$2000 less than debian plus VSPhere to run your virtual machines believe it or not. Dynamic I/o that moves the requests to the least uitilized SAN/volume means hardware savings too and Linux (outside of IBM's flavor) still does not have this.
The enteprise is totally different than the desktop world.
http://saveie6.com/
That most businesses don't even care about the cost of Windows. It is the defacto standard, it is the only thing that matters to them on the market. Linux is fun, but not as complete as Windows. It doesn't tie into Windows desktops, it doesn't have .NET or the programming environment of Windows. Linux feels hacked together, incomplete. It is not a commercial product with everything included that you could possibly want.
I am also sure, that $6000 dollars for a Data Center OS isn't much to most people. It excludes the consumers out there from affording it, but corporations and businesses? It is a small part of their bottom line. I think Microsoft realized they could charge almost anything for it. They already excluded the penny pinching start up and home user from buying it, just by charging for it. Anyone that has money though can easily afford it, at nearly any cost, which I am sure is what Microsoft knows. I am not saying Linux is not competitive, it is a great OS, but when it comes to customers of MS and Windows, it doesn't matter if Linux is out there. It is purpose orientated, they will buy what fits their needs for the given task. Sometimes one or the other doesn't work.
Hello,
While raising the price on an enterprise product is a good way to boost short-term revenue, it seems to me that companies might begin to seek less expensive alternatives. In this case, though, that might not be Linux at all.
I haven't seen any mention of this so far, but I have to wonder if the price increase might be an attempt to make enterprises look at Windows Azure as an alternative to continuing to run their own datacenters.
Regards,
Aryeh Goretsky
Dexter is a good dog.
That's cool, turn more companies on to Linux.
GP is absolutely right in what they said.
You try to LOSE money in an expanding market. More on that later. The problem is, Microsoft isn't in an expanding market. Google an Apple are. Microsoft isn't really in that market, the mobile market.
In an expanding market, especially a market where critical mass is so important (think app stores), it's all about market share during the time when the market is doubling every year or so. Remember the search engine wars? There were seven major search engines. The largest was HotBot (Inktomi). Guess how much Hotbot, AltaVista, and Excite have made in the last five years? Google is making billions per quarter because they got controlling market share while the total market was tens of milllions. To get that critical market share during the growth phase, the right move is to spend as much as you can on to gain more market share. If you turned a profit, those profit dollars are dollars you should have spent on marketing, expanding production, or otherwise growing your market share.
But again, though his statement is true, it doesn't apply to Microsoft, unless they actually want to get into mobile. If they want to be a significant player in mobile, they should have spent another $400 million developing something that could compete. That would be a $400M "loss", in exchange for a shot to remain relevant in the consumer market.
What if Ballmer is using The Simpsons method, you know, drive it into the ground?
Because Datacenter has no limit on the VM's, and with server hardware expanding to easily handle an increasing number of them, the price increase seems to just be reflecting that. Yes, it's arbitrary, but they are running a business. When people are having to buy less than before, for whatever reason, the prices do tend to rise.
What this price increase does, it make it so that you need have something like 15 or more VM's per host to break even (compared to standard edition licensing), rather than the 10 or 12 before. For a company with the hardware capable of running hundreds of VM's per host, Datacenter licensing is still a no-brainer.
What are you talking about? You don't have to buy Oracle DB with Solaris. Are you thinking Exadata instead maybe?
MS lost nearly a billion on that (and now their WinRT ads are getting obnoxiously frequent as they try to hock their stock).
Chas - The one, the only.
THANK GOD!!!
Remember that Midori thing MS said a few years ago? Yeah me too, they said it will come into play when Windows is dying....
People once told me 68K ram was all we needed,
We do some high-level support for Adobe products. We run Adobe software almost exclusively to provide support, maybe 15 times a year for a few minutes each time. $600 per year is NOT cheaper. We will help organizations move to other software.
Bad News: Lincense to Kill. Good News: there are alternatives!
It's just not that easy to move your apps from Windows to Linux and in the outsourcing space, customers don't want to hear it - they aren't interested in data center operations costs until it's time to renegotiate their contracts. The cost of migrating is generally higher than the cost of licensing especially when you factor in all the related and linked apps like Sharepoint, AD and so on. What customers will do is scream at service providers to squeeze more performance out of bigger hardware instead.
They should have waited till they had more of their customer base tied into Office 365, and then raised prices. As it is, many companies I know are wavering between going with an all Microsoft future (along with 365), or going with a mixed Linux/MS environment. This will make that decision easier.
On the hosting side of things, data centers never purchase Microsoft Server licenses outright, as the actual instances of Windows Server are run by clients. Therefore, the only way to be compliant with Microsoft's terms is to offer licensing under the SPLA program, which offers licensing Microsoft Software for a monthly cost. Also, with Windows Server 2012, they have gotten rid of Windows Server Enterprise, and there is now only really Windows Server Standard and Windows Server Data Center, which is functionally identical software. The only difference is that Standard allows for up to two instances on the same hardware, whereas Data Center Edition allows for unlimited instances on the same hardware. However, you need licenses for each physical processor. You can just add on additional Standard licenses until the Data Center Edition pricing makes sense. Perhaps one of the reason they're raising prices, is that with the increases in processing power per server, unlimited instances result in far many more virtuals now than before.
http://astutehosting.com/
Anyone else see the closing of TechNet subscriber downloads as a prelude to raising prices on business licensing? Eliminating their own source of low cost licenses was step 1, before step 2 'substantially raising the cost of the available licensing'.
Finally some leadership coming out of the evyl empire.
It's almost as if they're trying to run the company into the ground. They committed everything to tablets with the new OS and plans, while they are failing at this they're now hiking up server software prices to force people to switch from them on that? In a couple years they aren't going to have a market left they do well in.
Death of a giant.
Where I've worked - even at companies extremely friendly to UNIX/Linux, we still had 40% Windows servers. BTW, I'm not talking 40/60 servers I'm talking about 20K Windows and 30K UNIX/Linux.
The place I work now is tiny. We have complete control over server decisions. There is 1 Windows server ... Quickbooks. Everything else is Linux. Zimbra, Alfresco, Redmine, OpenVPN, git, nginx, perl, python, Android, FreeSwitch, pfSense, plus remote desktops are Ubuntu. Not all businesses can do what we do.
When I speak at local business meetings, I point out the F/LOSS we use to run our business daily. Other businesses are interested, but their IT guys have 5 yrs of MS training and not a clue about Linux except it doesnt' run their favorite game.
Most people/companies do not run the "Datacenter" version of Windwos server. It is the guys with lots and lots of virtualization who will, assuming they haven't already been screwed by VMware. BTW, my new company used to push VMware ... until they screwed the tihte license models and costs. Within 6 months, VMware ESX/i was gone and we've been running KVM ever since; happily running. KVM **is** a replacement for any size virtualization farm these days and is not nearly as picky about hardware as VMware.
Win2k12!? WTF, are zeros in short supply?. /rant
- T