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In multi-core era, per-socket pricing faces challenges

Analysts wonder how long scheme can last as x86 processors hit 12, 16 and more cores

April 2, 2010 11:02 AM ET

Computerworld - The arrival of eight and 12-core x86 chips may make per socket software licensing seem like a good deal for users of Microsoft server software. The new multicore technology promises to let them increase chip capacity while theoretically reducing the number of sockets.

At this point, Microsoft doesn't seem particularly worried that its server licensing revenue will melt away as its customers move to the increasingly powerful chips. However, analysts wonder how long that will last as chip makers add more and more cores to each processor.

Indeed, Microsoft officials today say there are no plans to change the per socket pricing approach the company uses today, even as Advanced Micro Devices Inc. promises to start shipping 16-core chips next year.

Eric Jewitt, director of Windows server marketing at Microsoft, said the company looks at core increases as a continuation of Moore's Law, a doubling of capacity every 18 months or so.

A company could increase compute capacity by migrating from quad-core to 12 cores, which would consequentially reduce its sockets and software licensing costs.

However, that only works if the user is taking a mirror of the database onto the new chips, said Jewitt. While chip capacity increases, so is the amount of data, roughly doubling every year and creating a need for more capacity, he said.

The gains in compute power aren't necessarily matched by software.

As chip makers add more cores per chip, it creates a need for software that can perform in increasingly parallel environments, said Scott Rosenberg, CEO of Miro Consulting, Inc., a Woodbridge, N.J.-based firm that advises companies on software licensing issues. "The software industry needs to catch up right now to the hardware industry," he said.

Still, the chip vendors are making a point of showing that users can reduce the number of servers by moving to their high capacity chips.

Not all vendors use the per-socket pricing schedule.

Oracle Corp., for instance, instead assigns a value for each by chip manufacturer. In the case of AMD and Intel chips, for example, Oracle has set a processor factor of .50 per core, meaning a quad core is counted as two chips.

Analysts wonder if per-socket, or even per-core pricing, will survive over the long term.

On the issue of the per-socket model, Rosenberg believes that as core counts increase it is inevitable that Microsoft will move to some other pricing scheme. Per-core pricing, he said, "has got to be a consideration."

Christopher Voce, an analyst at Forrester Research Inc., said that software vendors may start charging more for supporting tools to offset the impact of the increasing cores. He added that with the increasing abstraction of the hardware layer to virtualized environments, it will be increasingly harder for vendors to price based on physical assets.

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