Single License for Dual Core at Microsoft

Microsoft said it has clarified its software
licensing policies to address a new trend in microprocessors and to
keep the pressure on its rivals.

The Redmond, Wash.-based software vendor said starting today it will
continue to price its software based on its current per-processor model
and not change it to accommodate hardware that contains dual-core and
multi-core processors.

The decision gives Intel and AMD a break, as Microsoft had been
considering expanding the practice as the semiconductor industry shifts
to a multi-core strategy.

Not so for Microsoft’s rivals like IBM , Oracle
, BEA and Veritas , which do not publicize their software licensing

“From a software industry perspective this is an intelligent and
aggressive move by Microsoft to try and seize the low ground in TCO
conversations,” Stephen O’Grady, senior analyst at research firm
RedMonk, told “Many enterprise application
vendors are struggling with the implications of multi-core architectures
and its pricing implications. Microsoft’s unambiguous position here
stands to benefit them at buy time and will pressure competing vendors
to follow suit. Between this decision and Sun’s per-employee licensing
options, customers stand to benefit from more predictable and manageable

Microsoft’s revised licensing plan applies to several Windows Server
products, including Microsoft SQL Server and Microsoft BizTalk Server.
For example, Microsoft said its SQL Server Standard edition could run on
a four-processor server with dual-core processors firing on all eight
cores and needing only four licenses.

Dual-core processors, which consist of two cores on one chip, are
widely seen as a promising way to boost computing power, allowing
servers, workstations and PCs to perform more functions simultaneously.
Both Intel and AMD report that they are shifting to a dual-core strategy
in 2005 with massive volume shipments expected in 2006.

The change addresses a power consumption and static leakage problem
that have been plaguing the current semiconductor manufacturing process.
The choice brings an end to the MHz/GHz marketing campaign that has
dominated the minds of PC consumers for the past 20 years.

“This may not have been a ‘must win’ for AMD and Intel, but it sure
could have slowed uptake of their dual-core chips if Microsoft had
decided to take the opportunity to try to squeeze more money out of
users,” Gordon Haff, a senior analyst with Illuminata told

Haff disagrees that the decision by Microsoft doesn’t have a direct
bearing on how other vendors license their software.

“It’s not like there’s only one way of licensing today. However, it
does create a sort of default assumption that cold lead to some heat on
vendors like Oracle. Of course, Oracle taking heat for their license
policies would be nothing new,” he said.

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