New Software Licensing Model Proposed for Multi-core Chips

Software sellers generally base their pricing on the number of CPUs that will run their software. The recent arrival of processors with two or more cores, however, has prompted some software sellers to reassess their licensing models.

The software industry is divided over how to license for multi-core processors, which are designed to do the work of two or more processors within a single CPU. The debate revolves around whether a software seller should license its product for each chip, as most do now, or for each core.

What’s needed, according to David Znidarsic, VP of technology for Macrovision, is “a model based on value rather than CPUs and cores."

Whether a software vendor charges per core or per processor, the argument remains focused on the environment rather than the value, according to Znidarsic. As multi-core architectures continue to evolve, and as other technologies emerge, environment-based pricing may become far too complex to manage and ultimately could cause customers to become confused and dissatisfied, he says.

"Many software vendors are discovering that CPU-based pricing does not effectively capture the true value of their software," adds Amy Konary, program director for Software Pricing, Licensing, and Delivery at IDC. "A flexible model based on value can be the best approach, but once the appropriate value metric has been determined, tracking and reporting can be challenging for the vendor and customer.”

Macrovision is touting it's FLEXnet line of Software Value Management solutions as an answer to the debate. SVM enables enterprise to price their products based on the number of queries run in a database application or the capacity used by a storage application. At the same time, SVM gives give enterprises granular details on what applications they are using and how they are using them to help reduce costs and increase productivity, Macrovision says.

For publishers, SVM can translate into greater revenue opportunities and great flexibility in offering a range of delivery models for customers, Macrovision claims. Enterprises benefit from a more rational and understandable pricing structure, which is directly tied to how they access and use software versus how many cores they are running on a database server, the company adds.