Andrew Pollack's Blog

Technology, Family, Entertainment, Politics, and Random Noise

Microsoft is attempting to rationalize licensing in a world of multi-core, multi-processor, and virtual machine technology

By Andrew Pollack on 10/10/2005 at 08:40 PM EDT

Suppose you have a product that sells for $1000 per machine on which it is run. Your revenue is based on the model of a single license handling about 1,000 users, so its a $1/user revenue stream. Now along comes Intel and AMD offering faster processing, dual processing, and other cool technologies and now your software can handle 10,000 users on a single machine. What do you do? It still costs you the same money to create, update, and support your software - but now your revenue stream is 10 cents per user instead of a dollar per user.

You could start charging $10,000 per server, but then nobody with less than 10,000 users can afford your software. Per user software increases your costs to support plus annoys the customer site who has to track it. Besides, what's a user? If you charge per user for server software, does that user get to use that license on ten servers? You could charge "per processor" for multiprocessor machines, but that just changes the equation on hardware from buying multiple processor to buying bigger and faster single processor machines.

Now start adding "Virtual Machines" into the mix. What if I run one really fast 4 processor machine configured with Linux as the host system and VMWARE hosting 10 virtual windows 2003 servers? Is that one, four, ten, or forty licenses?

I'm all for beating up on Microsoft, but as they struggle with this particular problem I have some small amount of sympathy. Its not an easy problem to solve at all. IBM attempts to address this with their "Express" licenses. These are real full blown software licenses limited to companies under a certain size. Its IBM's way of charging based on the size of the solution rather than the use of the software. Some will say that's a bad thing -- it is after all the same product. I say its a good thing, just hard as hell to administer.

You pick. Maybe you have a better model (don't talk to me of Open Source -- I make my living as a developer).


There are  - loading -  comments....

open source doesn't mean "can't make a living"By Alan Bell on 10/14/2005 at 01:04 PM CDT
I get paid to develop stuff. If I am not developing I don't get paid, I don't
get ongoing fees for the stuff I developed in the past. My work is generally
heavily bespoke and is given to clients on an open source basis, however they
pretty much never distribute it outside their own business. Some components I
develop for one client then use in projects for others, sometimes if these are
generally interesting I release them to a wider audience. That model suits me
OK, but I understand your work is more in production of finished products which
are probably more generally robust and have more work in them than my
developments so you can't reclaim the development costs from a single sale
which is what I effectivly do.
I don't have a great suggestion for a pricing model for software products. Per
processor/computer/employee all have their drawbacks. Per company kind of gives
it away to the big companies and penalises the small ones. Some kind of
multiplier of the market capitalisation might be fair, but would not work for
non-traded companies, and departmental deployments get tricky. I think it comes
down to a question of "how much would you like to pay?" plus services revenue
for installation and configuration.


Other Recent Stories...

  1. 01/26/2023Better Running VirtualBox or VMWARE Virtual Machines on Windows 10+ Forgive me, Reader, for I have sinned. I has been nearly 3 years since my last blog entry. The truth is, I haven't had much to say that was worthy of more than a basic social media post -- until today. For my current work, I was assigned a new laptop. It's a real powerhouse machine with 14 processor cores and 64 gigs of ram. It should be perfect for running my development environment in a virtual machine, but it wasn't. VirtualBox was barely starting, and no matter how many features I turned off, it could ...... 
  2. 04/04/2020How many Ventilators for the price of those tanks the Pentagon didn't even want?This goes WAY beyond Trump or Obama. This is decades of poor planning and poor use of funds. Certainly it should have been addressed in the Trump, Obama, Bush, Clinton, Bush, and Reagan administrations -- all of which were well aware of the implications of a pandemic. I want a military prepared to help us, not just hurt other people. As an American I expect that with the ridiculous funding of our military might, we are prepared for damn near everything. Not just killing people and breaking things, but ...... 
  3. 01/28/2020Copyright Troll WarningThere's a copyright troll firm that has automated reverse-image searches and goes around looking for any posted images that they can make a quick copyright claim on. This is not quite a scam because it's technically legal, but it's run very much like a scam. This company works with a few "clients" that have vast repositories of copyrighted images. The trolls do a reverse web search on those images looking for hits. When they find one on a site that looks like someone they can scare, they work it like ...... 
  4. 03/26/2019Undestanding how OAUTH scopes will bring the concept of APPS to your Domino server 
  5. 02/05/2019Toro Yard Equipment - Not really a premium brand as far as I am concerned 
  6. 10/08/2018Will you be at the NYC Launch Event for HCL Domino v10 -- Find me! 
  7. 09/04/2018With two big projects on hold, I suddenly find myself very available for new short and long term projects.  
  8. 07/13/2018Who is HCL and why is it a good thing that they are now the ones behind Notes and Domino? 
  9. 03/21/2018Domino Apps on IOS is a Game Changer. Quit holding back. 
  10. 02/15/2018Andrew’s Proposed Gun Laws 
Click here for more articles.....


pen icon Comment Entry
Subject
Your Name
Homepage
*Your Email
* Your email address is required, but not displayed.
 
Your thoughts....
 
Remember Me  

Please wait while your document is saved.