Microsoft Corp., IBM and Novell Inc. last week all responded to customer calls that they adapt their licensing models to better reflect the fast-paced and ever-changing technology development world.
Microsoft will now no longer charge users of Windows Server System products in virtual machine environments licensing fees at installation but rather at the time of use, while IBM and Novells SuSE introduced an annual subscription fee for all the servers in an IBM BladeCenter chassis running SuSE Linux Enterprise Server 9.
Enterprises have long pressured software vendors to change their licensing models to reflect a world that has moved away from traditional desktop PCs and servers.
This disparity between vendors and end-user clients is clearly reflected in a study released last week titled “Key Trends in Software Pricing and Licensing” that canvassed the views of 500 industry executives and was sponsored by the Software & Information Industry Association, Centralized Electronic Licensing User Group, and Macrovision Corp.
The survey found that although more than two-thirds of software vendors have changed their pricing and/or licensing policies during the past two years, just 28 percent of enterprises are satisfied with those strategies, “suggesting that ISVs could do a better job of listening to their customers,” the report said.
Novell officials concede that software licensing has been static, being either tied to users or machines. But the definition of those entities is changing. For example, a user can now be defined as a desktop PC, a laptop, a person or a handheld. Those definitions are changing, as are the definitions of servers, which now include clusters, grids and virtual servers. The licensing changes reflect the way vendors are adapting to a changing world, where licensing must be more flexible to accommodate different technology scenarios, experts say.
Chris Burry, technology infrastructure practice director for Seattle-based integration specialist Avanade Inc., agreed, saying that the history of technology is that it tends to advance far more rapidly than the associated business and licensing models of the vendors.
For its part, Microsoft appears to be paying attention to what customers are saying, moving to simplify the licensing for Windows Server System products that are used in VM environments. Customers will no longer have to license every inactive or stored instance of a Windows Server System product. They can now create and store unlimited numbers of instances, including those for backup and recovery, and pay only for the maximum number of running instances at any given time, officials at the Redmond, Wash., company said.
Microsoft is also changing its licensing for future products. Licenses for the upcoming Windows Server 2003 R2 Enterprise Edition, expected to ship later this year, will allow customers to run as many as four virtual instances on one physical server at no additional cost.
In addition, when Microsoft ships the Datacenter Edition of Windows Server “Longhorn,” expected in 2007, the license will give users the right to run an unlimited number of virtual instances on one physical server.
Steve Acterman, director of corporate IT management at Volt Information Sciences Inc., in Orange, Calif., and who also sits on Microsofts Licensing Advisory Council, said the licensing changes showed that not only is Microsoft going to move forward aggressively into new technologies, but it is also going to help enable its customers to do so without making them worry about a huge barrier to entry.
“We provided Microsoft with feedback around the whole virtualization concept and how wed like to see it structured so we can make use of it,” Acterman said. “They basically took our feedback and adopted it. This will allow our business to be more efficient and also reflects Microsofts willingness to listen to customers.”
Avanades Burry added that the bottom line is that the changes will ultimately let customers derive greater value from their investments, which is what CIOs are looking for.
IBM and Novells new model is somewhat different. The companies unveiled last week a single annual licensing fee for all the servers running in an IBM BladeCenter chassis running Novells SLES 9. The 14 blades in the IBM BladeCenter chassis can also be a mix of Intel Corp., Advanced Micro Devices Inc. or Power-based servers, and the license can be used with any of these blade servers as long as they are associated with the chassis.
The license is priced at a flat fee of $2,792 for a one-year chassis license or $6,980 for a three-year license and includes standard 30-day installation support.
“This is the first-of-a-kind pricing deal, as, until now, operating systems and applications have been priced per user or per server or via an enterprise license,” said Juhi Jotwani, director of IBMs BladeCenter and xSeries solutions, in Raleigh, N.C.
IBM is now also aggressively encouraging application and operating system vendors to shift to this model. “The whole point of leveraging this differentiated hardware is ease of management and integration, and so we are encouraging the application vendors to also price their software based on a blade center chassis,” Jotwani said.