September 15, 2004

Dual-core processors present potential licensing problems

Author: Jay Lyman

Enterprise users may be getting a rush with all of the power they get as AMD and Intel deliver new server processors in dual-core and multi-core form, but the software licensing issues around counting cores may bring some headaches as well.

Dual-core technology represents a potential doubling of power, as one processor with two cores can take on the work of two processors, but there are concerns software licensing fees that are based on processors may also double.

The jump to dual-core and multi-core processors is a significant push forward, Gartner
Research Vice President Martin Reynolds said, referring to near doubling of performance in most server applications. "This is the biggest jump we have seen for many years," Reynolds said.
"Nothing compares."

The question is whether software licensing prices will double as dual-core processors are
counted as two, or get slashed in half as companies use one licensed processor to do the work of two.

"Server software vendors are drifting towards per-core licenses," Reynolds said. "Dual-core processor [users] could therefore face doubled licensing fees."

On the other hand, software vendors face a loss if only half the
processors are needed to deliver the same performance using multiple cores.

"The industry is going to have to converge on a solution," Reynolds said.
"The biggest risk is that a server user might upgrade to dual-core
processors, then face an upgrade fee of tens of thousands of dollars after a
software licensing compliance audit."

Let's make a dual-core deal

Some enterprise software vendors already account for dual-core or
multi-core processors in their CPU-based licensing schemes. Red Hat, for example, has maintained
a "per-system" pricing basis with the advent of dual-core and hyper-threaded
processor capabilities, Red Hat Enterprise Product Manager Mike Ferris said. A
system, he said, is further defined by the number of physical processors or
sockets contained within the machine, not by the capabilities of those
processors occupying the sockets.

"In short, Red Hat defines physical CPUs equivalently to sockets, so
dual-core and hyperthreading are counted as a single CPU when determining
which version of Enterprise Linux to deploy," Ferris said.

A single physical CPU with a dual core and hyperthreading capabilities
resulting in four logical CPUs would be counted as one CPU or socket,
according to Red Hat's policy.

An IBM representative, while acknowledging the newness of dual-core and
multi-core technology, said the company is sticking to the "traditional"
basis of per-processor licensing.

"Right now, we stick to the traditional model and that's the way
customers figure license costs," he said. "We're not ruling out changes in
the future, but nothing's happened to make changes to the traditional
licensing model. Now, it's based on processor."

That stance differs from a dual-core approach that would reportedly mean licenses for two processors with dual-core users running IBM DB2 or WebSphere. The same report indicates that Oracle, which did not respond for this article, would charge for two processors when licensing its software for dual-core users.

Microsoft and other software makers have not yet indicated exactly how
they will handle licensing for dual-core users, prompting some industry
speculation that the software side is waiting to see how customers and competitors respond to the advent of multiple processor cores.

Although companies were reluctant to divulge dual-core questions or concerns
from their customers, some did indicate the issue is a significant one.
Microsoft said it was still working with customers to come up with the best
multi-core licensing approach.

"We remain fully committed to developing flexible licensing models that
allow our customers to take advantage of newer technologies that may not be
introduced into the marketplace as of yet, such as multi-core, but at this
time we have nothing to announce as we are still garnering feedback from our
customers to understand how they will use this technology," said an email
response from Sunny Jensen Charlebois, Microsoft product manager in the Worldwide Licensing and
Pricing group.

Opportune leap to Linux?

Along with the contentions that the technology is ahead of licensing, there are also claims that proprietary vendors already versed in EULAs will
have an advantage over Linux and open source licenses. Reynolds said dual-core support in server-friendly Linux means that its users face the same software application licensing issues.

Mercury Research President Dean McCarron, however, said Linux could
actually benefit from the dual-core developments. "If there were no changes in the pricing structure, it could introduce some opportunity for Linux," McCarron said. "It's far more likely we'll see changes in licensing terms."

McCarron said although the potential dual-processor price doubling is a
valid concern, software vendors are aware of it and responding. "Dual-core is unlikely to be an opportunity for software vendors," he said. "It's something they'll have to deal with."

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