Users moan software price increases for dual-core CPUs

The advent of dual-core processors with two CPUs on a single chip is causing many IT managers to wring their hands over the hefty increases in licensing fees sought by major software vendors.

Users and analysts at the recent Gartner IT & Software Asset Management Summits in Orlando said companies that have installed servers based on dual-core chips or that have made plans to do so are being hit by vendors such as IBM and Oracle with software licensing fees that are twice what they were paying.

Vendors are trying to justify the increases on the grounds that the application and database servers on which their software runs will contain twice as many processors when they're using dual-core devices, conference attendees added. Some said the price increases may be a starting point for negotiations, but they reluctantly acknowledged that their companies will likely have to pay more for software in the long term.

In April, Oracle clarified information posted on its website to inform customers that "a multicore chip with N processor cores is treated as N processors" for software licensing purposes. "But that's the way we've always charged," vice-president of global licensing and pricing strategy at Oracle, Jacqueline Woods, said.

A spokesperson for IBM confirmed that it plans to continue charging users based on the number of processors on their servers. "There's always room for negotiation, but one processor is the basis for the licensing cost," the spokesperson said. "Whether two processors sit on the same piece of silicon or not, we'll still charge for those two processors."

Gartner analyst, Alvin Park, said he has heard from Microsoft users that they're getting similar messages about software costs for systems with dual-core chips.

But product manager in Microsoft's worldwide licensing and pricing group, Sunny Jensen Charlebois, said in an email statement that the company has nothing to announce at this time. Because of the complexity of the issue, Microsoft is continuing to gather feedback from customers and business partners "to evaluate how they will use this technology," she added.

Not surprisingly, 10 IT managers interviewed at the conference all said the increased licensing fees are unfair.

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Thomas Hoffman

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