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7/25/2006
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IBM Changes Its Server Software Pricing For The Dual-Core Era

Per-processor pricing isn't going to cut it as companies adopt multicore systems and virtualization.

IBM on Tuesday unveiled big changes to the way it prices commercial software, but the company says customers won't have to pay more for the software they're currently running. The new pricing model is designed to deal with the proliferation of dual-core chips and server virtualization, which make the old per-processor pricing model problematic.

Under a new plan called "processor value unit licensing," users of IBM's middleware products will pay a license fee based on a value that IBM assigns to the processors on which the software is run. The higher the value, the more costly the license. Higher power processors receive the highest values. For instance, a dual-core IBM Power5 chip counts as 100 "processor value units" per core. A dual-core Intel Xeon chip scores 50 units per core.

The plan aims to simplify software licensing costs in an age of dual-core processors and virtual server environments, an IBM spokesman says, in which applications may be stretched across numerous machines containing multiple chips. Previously, IBM—like most commercial software vendors--priced software on a per-processor basis. But that method becomes unwieldy when applied to dual-core chips or virtual environments. The older method also didn't always factor in performance differences between chips from different manufacturers.

Existing customers with current software licenses won't be affected by the changes, an IBM spokesman says. However, they'll need to move to the new pricing plan if they upgrade their IBM software or move to new hardware. The plan applies to most IBM middleware products, including those in the DB2, Websphere, Lotus, and Tivoli families.

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