Microsoft: No New Fees On Dual-Core, Multicore Processors

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On Tuesday, the Redmond, Wash., software giant officially announced it would cede to wishes of both manufacturers and continue to license its server software on a per-processor basis rather than impose a new licensing scheme for multicore offerings. This means customers using software currently licensed on a per-processor basis, including Windows Server, SQL Server and BizTalk, will enjoy raw performance gains from multicore processors without paying for the extra engine power.

"We decided not to change our policy," said Cori Hartje, director of marketing and readiness of Microsoft's Worldwide Licensing and Pricing group. "We won't charge twice for dual-core."

A customer running SQL Server Standard, for example, can run it on a four-processor server running dual-core processors--and utilizing the cores--without paying for more than four licenses, Microsoft said.

Microsoft's decision will put pressure on Unix competitors that currently charge for multicore processing, analysts say.

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"It's a big deal for customers because Microsoft's policy is contrary to precedents that have been set by RISC/Unix where multicore did count in terms of licensing," said Brian Richardson, senior program director of Meta Group. "It's a bold move for Microsoft, and software vendors that price by the core on Unix have six to nine months to come up with a new approach or the price-performance gap between Unix and Microsoft products is doubled."

Neither Oracle nor IBM have disclosed their licensing plans for x86-based and 64-bit extended multicore processors.

Both AMD and Intel are in a heated race to be the first providers of dual-core processors.

AMD expects to make its dual-core Opteron processors available in mid-2005 and dual-core AMD64 processors available in the second half of 2005. Intel will ship dual-core processors for its servers, desktops and mobile processors in 2005, a spokesman said.

Meta's Richardson said Microsoft's policy is in keeping with its existing policy on multithreading processors and volume business model.

He noted that Microsoft also faces pressure from the advance of Linux and open-source software, which carries no processor-licensing requirement.

At Gartner Symposium ITXpo in Orlando, Fla., on Tuesday, Intel CEO Craig Barrett said Microsoft's decision sets an example for other software vendors.

"The industry is going from multiprocessing servers to multicores within processors and multiple threads within each core, so software companies have to decide how to license," Barrett said during his keynote. "Microsoft apparently will license per package per processor regardless of its capabilities. I applaud them for that."

Barbara Darrow contributed to this report.