The advent of powerful new multicore processors is adding impetus to a shift away from older forms of licensing, such as per-processor licensing, to per-user and even subscription licenses, as ISVs offer their products on demand over the Web or as a utility service.
Top chip manufacturers such as Advanced Micro Devices Inc., Sun Microsystems Inc., IBM and more recently Intel Corp. have introduced chips with two or more cores as a way to enhance processing power while reducing design complexity, power consumption and heat generation.
“We have been out advocating since last fall that in terms of multicore processors, ISVs should license by the processor and not by the processor core,” said Margaret Lewis, software strategy manager with AMD, based in Sunnyvale, Calif.
AMD works closely with the major operating system vendors, including Microsoft Corp., Red Hat Inc., Novell Inc. and Sun on licensing issues, Lewis said.
Generally, operating system vendors have adopted the policy of licensing by processor as opposed to processor core, and they also have applied it to various server and application software products that they offer, not just the operating systems, she said.
One exception is Oracle Corp., which licenses its database and server software per core rather than per processor, Lewis said. However, Oracle supports various licensing models, including site licenses and per-user licenses, depending upon what they negotiate with customers.
Some software companies that market software that runs on multicore RISC chips also license per core rather than per processor, Lewis said. IBM, for example, continues to license software by the core for RISC processors, “even though they have changed their methodology for x86 and theyre going to license by processor,” she said.
But even licensing by processor has become the exception rather than the rule in the software industry.
An October 2004 study of software licensing, sponsored by Macrovision Corp. with the Software and Information Industry Association, showed that currently only about 25 percent of software vendors license software on a per-processor basis.
The predominant licensing model is per seat, whether for individual machines or servers, which is supported by 56 percent of the vendors polled. The runner-up is concurrent user licensing, which is offered by 40 percent of the vendors.
The study also shows that subscriptions are the fastest-growing licensing model among software vendors. The number of vendors offering monthly, annual or other limited-term licenses will grow at least 17 percent over the next two years, according to the study, while the number of vendors offering perpetual product licenses will also decrease by 17 percent.
The study also predicts that by 2006, the number of vendors offering software subscriptions will gain parity with perpetual licensing, which is a license for the useful life of the software package.
However, AMD is advising dual-core processor buyers to avoid higher costs that might come with purchases of software that is licensed on a per-core basis. Buyers should negotiate alternative licensing terms, such as a flat-rate site license, whenever possible, the company said.
They should also consider purchasing two-processor servers rather than four-processor servers to stay within the standard edition limits of Microsoft Windows or other operating systems and applications.
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However, customers should also analyze total cost of ownership to see whether a smaller number of larger servers may actually cost less than smaller scale servers, after the full expense of hardware, software, network infrastructure and maintenance costs is tallied. Or, customers should just look for alternative software products that arent licensed on per-core terms, AMD advised.
Software licensing is a complicated issue for a company like NewEnergy Associates, a subsidiary of Siemens Westinghouse Power Corp. based in Atlanta that develops energy industry IT applications.
Whenever NewEnergy builds a new application, it might require the company to sign license agreements with as many as 18 different software vendors for a product that will run on the Web or on various processors, said Neal Tisdale, NewEnergy vice president of software development.
Thats why, when the company software developers are creating new applications, “I beg them to use new and cool stuff that falls into a legal area that I feel very safe in,” Tisdale said.
The fewer licenses he has to sign, the better he likes it, he said, no matter what server or processor type the application is supposed to run on.
Tisdale said he tends to like working with J2EE (Java 2 Enterprise Edition) and other Sun technologies because the licensing terms are generally uncomplicated.
“If it is an oddball [platform] I tend not to like it,” he said, because highly specialized, rarely used or highly proprietary technologies usually are burdened with complicated licensing requirements.
Sun Microsystems started offering per-employee licensing terms for its middleware technology when it started shipping dual-core SPARC IV processors, which it has been for more than 18 months, said John Fowler, executive vice president with Suns Network Systems Group.
“One of the things that dual-core technology does, fundamentally, is it pushes people toward looking at different kinds of software licenses than just a per-CPU license, which at this point is fairly antiquated,” Fowler said.
Software licensing has the potential to become even more complicated when chip manufacturers start shipping eight-core CPUs. “If you look at both SPARC and Intel, they have multithreading in addition to multicores,” Fowler said. At that point, “its very difficult to understand what the definition of a CPU is” for software licenses purposes, he said.
Suns eight-core SPARC processor, due for shipment in early 2006, runs four threads per processor, so it appears to the operating system to be a virtual 32-processor system on a single chip. “That is a radical example of multicore processing that is going to place more pressure on software licensing,” Fowler said.
Sun is offering a $140 per-employee license for Suns middleware stack, he said. “The idea is that you pay $140 per employee at your company and then you use the software on as many or as few CPUs as you wish to and on as many cores as you wish to,” Fowler said.
As multicore processors continue to proliferate, software vendors will have little choice but to move away from processor-based licenses and fees, Fowler said.
“The general trend from software companies is going to have to be toward site licenses, per-employee licenses or some other usage-based licenses, and not hardware-based licenses,” he said.
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