Microsoft readies server software pricing change

Microsoft readies server software pricing change

Microsoft plans to alter its per-processor licensing model at the start of April in a way that should provide relief for customers who run its software on partitioned servers, according to Microsoft executives.

The change could lead to significant cost savings for customers who use partitioning to segregate applications running on a single multiprocessor server, an analyst with Gartner, Alvin Park, said.

Some of those customers had complained that Microsoft's current pricing system required them to pay a license fee for each processor on their server even though the software might not actually be running on all of those processors, he said.

On April 1, Microsoft would introduce new per-processor licensing terms for eight server products that aim to provide a fairer option for customers who use partitioning, the head of Microsoft's licensing program, Rebecca LaBrunerie, said.

Under the new system, businesses would pay only for the processors that the software actually runs on, rather than 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, Washington, last week.

Using partitioning to cut licensing costs could be complex from a technology standpoint, but the new model offered the potential for big savings for some customers, Park said.

The issue primarily affected customers who 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 would be "a lot more fair and logical" for customers who use partitioning than the current system.

Server consolidation was a growing trend as businesses sought ways to cut their IT costs, and the new pricing model aimed to address that trend, she said.

The model eventually would be extended to Microsoft's Windows 2000 server operating system, LaBrunerie said. Microsoft recently acquired technology from Connectix with a view to providing software that would allow a single Windows server to act as a series of separate machine.

The company would discuss pricing changes for Windows 2000 when that virtualisation software was released, she said.

The new model will also apply to previous versions of the Microsoft products listed above. However, Microsoft would not offer refunds to customers who had already paid for software they were running on partitioned servers. Those customers would be able to reuse licenses that were "freed up" by the new system.

For example, under the current model a customer running SQL Server on a partitioned eight-way server would have paid for eight processor licenses, even though the software might have been running on only four processors.

When the new model kicked in on April 1, that customer would have four unused SQL Server licenses in hand, LaBrunerie said.

The changes applied only to customers on per-processor licenses and did not affect the server/client access license (CAL) model, Park said.

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