Microsoft: No Extra Fees

"It will make dual-processor solutions much more viable for our clients," said Ken Winell, CEO of Econium, a VAR in Totowa, N.J.

Microsoft, Redmond, Wash., will continue to license its server software per processor rather than impose a new licensing scheme for the dual-core processors coming from Advanced Micro Devices and Intel beginning in mid-2005, said Brent Callinicos, corporate vice president of worldwide licensing and pricing at the software giant.

The decision will make Microsoft's server software more affordable and give customers significant performance gains without additional software costs, partners said.

"It's a big win for consumers as these [multicore] CPUs take off," said Brian Bergin, president of Terabyte Computers, Boone, N.C. "Can you imagine a small business running SQL having to fork out twice for a copy?"

Other vendors have adopted the same stance. Last month, Novell, Red Hat and Sun Microsystems said their x86-based operating systems would run on dual-core processors without any licensing or pricing changes.

Microsoft's decision also puts pressure on competitors in the server applications market that currently charge extra for multicore processing. Oracle would license a dual-core processor as two separate CPUs, an Oracle spokeswoman said. Oracle would not say if it is reconsidering that policy. And IBM declined to comment.

One Linux solution provider said Microsoft's policy reinforces the reality that the price tag on software is an important buying consideration.

"Microsoft, Sun, Oracle, IBM, BEA and others will attempt to continue to license their software per logical CPU," said Anthony Awtrey, vice president at Ideal Technology, Orlando, Fla. "This is one of the areas [where] open-source projects like Linux, JBoss, Tomcat, MySQL and Apache have a clear advantage. You can scale application performance based solely on hardware costs."