Microsoft readies server software pricing change

Microsoft Corp. plans to adjust its per-processor licensing model early next month to provide relief for customers that run its software on partitioned servers, a Microsoft executive said yesterday.

The change could lead to significant cost savings for customers that use partitioning to segregate applications running on a single-multiprocessor server, said Alvin Park, an analyst at Gartner Inc. Some of those customers have complained that Microsoft's current pricing system requires them to pay a license fee for each processor on their servers even though the software may not actually be running on all of those processors, Park said.

On April 1, Microsoft will introduce new per-processor licensing terms for eight server products that aim to provide a fairer option for customers that use partitioning, said Rebecca LaBrunerie, who heads Microsoft's licensing program. Under the new system, businesses will pay only for the processors that the software actually runs on, rather than for every processor in a partitioned server, she said.

The change will affect SQL Server 2000, BizTalk Server 2002, Internet Security and Acceleration Server 2000, Commerce Server 2002, Content Management Server 2002, Host Integration Server 2000, Microsoft Operations Manager 2000 and Application Center 2000. Microsoft disclosed its plans at an analyst meeting in Redmond, Wash., last week.

Using partitioning to cut licensing costs can be complex from a technology standpoint, but the new model offers the potential for big savings for some customers, Park said. The issue primarily affects customers that consolidate single- or dual-processor servers onto larger systems as a way of cutting hardware and systems management costs, he said.

LaBrunerie said the new model will be "a lot more fair and logical" than the current system for customers that use partitioning. Server consolidation is a growing trend as businesses seek ways to cut down on their IT costs, and the new pricing model seeks to address that trend, she said.

The model eventually will be extended to Microsoft's Windows 2000 server operating system, LaBrunerie said. Microsoft recently acquired technology from Connectix Corp. in hopes of providing software that will allow a single Windows server to act as a series of separate machines, she noted. The company will discuss pricing changes for Windows 2000 when that virtualization software is released, she said.

The new model will also apply to earlier versions of the eight Microsoft products affected by the change, although Microsoft won't offer refunds to customers that have already paid for software they're running on partitioned servers. Those customers will be able to reuse licenses that are "freed up" by the new system, the company said.

For example, under the current model, a customer running SQL Server on a partitioned eight-way server is paying for eight processor licenses, even though the software might be running on only four processors. When the new model kicks in on April 1, that customer will have four unused SQL Server licenses in hand, LaBrunerie said.

The changes apply only to customers on per-processor licenses and don't affect the client/server access license model, Park said.

Microsoft has posted information about the changes on its Web site.

Some analysts have predicted an industrywide shake-up in per-processor pricing as technologies such as clustering, partitioning and chips with multiple cores become more widespread. Those technologies can make it harder to apply traditional per-processor pricing systems. Further out, grid computing and the idea that computing resources can be tapped as a utility from wherever they are available could make the per-processor model redundant, those analysts have said.

Copyright © 2003 IDG Communications, Inc.

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