Single License for Dual Core at Microsoft

Microsoft said it has clarified its software licensing policies to address a new trend in microprocessors and to keep the pressure on its rivals.

The decision gives Intel and AMD a break, as Microsoft had been considering expanding the practice as the semiconductor industry shifts to a multi-core strategy.

Not so for Microsoft's rivals like IBM, Oracle , BEA and Veritas , which do not publicize their software licensing strategies.

"From a software industry perspective this is an intelligent and aggressive move by Microsoft to try and seize the low ground in TCO conversations," Stephen O'Grady, senior analyst at research firm RedMonk, told internetnews.com. "Many enterprise application vendors are struggling with the implications of multi-core architectures and its pricing implications. Microsoft's unambiguous position here stands to benefit them at buy time and will pressure competing vendors to follow suit. Between this decision and Sun's per-employee licensing options, customers stand to benefit from more predictable and manageable pricing."

Microsoft's revised licensing plan applies to several Windows Server products, including Microsoft SQL Server and Microsoft BizTalk Server. For example, Microsoft said its SQL Server Standard edition could run on a four-processor server with dual-core processors firing on all eight cores and needing only four licenses.

Dual-core processors, which consist of two cores on one chip, are widely seen as a promising way to boost computing power, allowing servers, workstations and PCs to perform more functions simultaneously. Both Intel and AMD report that they are shifting to a dual-core strategy in 2005 with massive volume shipments expected in 2006.

The change addresses a power consumption and static leakage problem that have been plaguing the current semiconductor manufacturing process. The choice brings an end to the MHz/GHz marketing campaign that has dominated the minds of PC consumers for the past 20 years.

"This may not have been a 'must win' for AMD and Intel, but it sure could have slowed uptake of their dual-core chips if Microsoft had decided to take the opportunity to try to squeeze more money out of users," Gordon Haff, a senior analyst with Illuminata told internetnews.com.

Haff disagrees that the decision by Microsoft doesn't have a direct bearing on how other vendors license their software.

"It's not like there's only one way of licensing today. However, it does create a sort of default assumption that cold lead to some heat on vendors like Oracle. Of course, Oracle taking heat for their license policies would be nothing new," he said.

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