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Software Vendors Try New Pricing Schemes For A Virtualized World

When you go to buy new servers to rev up the company's IT infrastructure, look carefully under the hood. The added horsepower just might change the price you pay for the software that runs on them.

Software vendors such as IBM, Microsoft, and Oracle have priced their server-based software--databases, application servers, and operating systems--according to the number of CPUs the software runs on. Software with a $10,000-per-CPU price tag costs $40,000 when installed on a four-way server. Pleasantly simple.

With the advent of dual-core and multicore processors and server virtualization, that simplicity's fading fast. Multicore processors and virtual servers let IT departments shift workloads more effectively, but they also make it difficult to track how many processors and servers the software runs on. As these technologies go mainstream, software vendors are scrambling to make sure they don't lose revenue or stifle the promising technologies with oppressive licensing.

IBM faced this reality last week when it unveiled a major change to licensing for middleware and other software products, using a complicated scale based on values IBM assigns to specific processors. IBM's goal is to move away from per-processor pricing and toward usage-based utility pricing.

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