Analysts such as Illuminata's Gordon Haff speculate that Microsoft was probably dipping its toes in the dual-core double-dipping waters, but found the market would not tolerate higher software costs as a result of more powerful and efficient hardware.
"Microsoft was probably figuring out if there was any way it could charge per core in processors," Haff said.
The analyst indicated that Microsoft's stance -- which differs from that of other vendors, including IBM and Oracle, that have defined dual-core processors as the basis for two licenses -- is unlikely to change the way all vendors license software for multi-core chips. However, Haff said Microsoft's move "does create a way of doing things and including users' input." The analyst also indicated that other technologies and trends, particularly virtualization, are likely to move software licensing away from the per-processor basis.
Virtualization looms large
Haff said despite the attention to dual-core and multi-core software licensing, the issue of virtual machines and how software is licensed for use on them is also an area of concern to both vendors and customers.
"There's actually some difference in the Linux world on this," Haff said. He cited Red Hat's approach of charging per virtual machine, while SUSE charges are based on a per physical processor basis, regardless of how many virtual machines it supports.
"Like Microsoft, Red Hat actually charges for each instance of Red Hat running," Haff said, adding that Red Hat nonetheless remains dominant over Novell's SUSE in servers.
However, Haff said as the number of virtual machines that can be created using a single processor continues to rise, so will the pressure for Red Hat to alter its licensing.
"They will probably be forced to make some changes, but I think their attitude right now is that they're doing fine," Haff said, referring to Red Hat revenue that might be lost with licensing similar to SUSE's. "When it comes time, they'll deal with it at that time, which is a perfectly reasonable approach."
Haff also said IBM -- which has danced around the dual-core question, but signaled a requirement for licenses for each core -- is in a similar position when it comes to multi-core software licensing.
IBM has actually been selling its dual-core Power 5 processor for years, Haff noted. "IBM has been very happy to really talk about each core as if it was a processor," Haff said. "IBM has tended to put more emphasis on having fewer but faster processors."
Haff also said if IBM does have to change its per-processor approach, it would be less painful since the company is also selling hardware. However, he indicated all software vendors, including IBM, will have to deal with software licensing for virtualized hardware.
"Longer term, all of these guys will have to deal with virtualization," he said. "We're moving away from server software as a kind of physical thing."
Per-processor licensing is no longer viable
Haff said the arrival of multi-core and hyper-threading technology in processors, as well as virtualization, are all making the processor moot as a basis for licensing. "However you characterize a processor, it's not going to be a viable way of doing things," Haff said. "Static software licenses are no longer going to work."
In light of virtualization and the movement of workloads among CPUs and servers, Haff said older timesharing models, or software licensing based on use, is more likely, and is probably being considered now by vendors. The issues were aired by both software buyers and sellers recently at the SoftSummit event in Santa Clara, Calif.
IDC analyst Jean Bozman said with Intel Itanium and Xeon dual-core chips and AMD's dual-core Opteron all expected in the next year and a half, users are benefiting from processors that produce less heat and use less power. They are also evaluating software licensing with different considerations now, Bozman said.
"This trend in the industry is causing people to rethink how they approach ISV licensing," she said of multi-core chips. "As this process goes on, we'll see that ISVs may have to look at different ways to do it."
Also using IBM as an example, Bozman agreed that virtualization will force changes in how software is licensed on the latest hardware, referring to the micro-partitioning of the existing Power 5 server.
"There's partitioning on one chip," Bozman said. "Clearly, you're looking at a different usage model from ISVs because you have multiple images there."
Bozman said software site licenses that cover entire facilities or metered or monitored licensing similar to what IBM has done with some mainframe licensing may become more popular. "There are other ways to do this, which before anyone went to per-processor, were being considered," she said.
Breaking it down beyond the processor
Bozman said the software licensing implications of advancing hardware is nothing new since the industry has seen two-way servers do the work of two machines, four-way servers do the work of four, and so on. "Now, it's going to be driven to the sub-processor level," Bozman said. "There's a lot of consolidation of workload and virtualization going on, regardless of operating system. The question is how do you charge for it?"
Referring to an Intel developer forum earlier this year, Bozman said the matter is something ISVs and OEMs are actively discussing and working to address. "As it becomes more commonplace, more details about different strategies will emerge," she said. "At the moment, it is in the initial discussions."
In addition to licensing based on usage, or the so-called utility pricing model, companies such as Macrovision and Sun are also pushing subscription-based pricing and licensing, which does not appear to be any more beloved by customers now than when Microsoft floated the idea unsuccessfully more than two years ago.
Bozman said there is no one direction software licenses are likely to go, but she did indicate that some changes are necessary. "You can have a lot of software activity that happens on much smaller pieces of real estate," she said. "The problem is, different processors are capable of different amounts of work. There are so many choices these days."