Open source forces licensing changes

The growth of open source means proprietary software licensing models need updating, according to industry leaders.

Users complain that traditional models are "too costly and complex" because of the high impact of licence renewals on their return on investment, according to Arleen Adams, UK and Ireland software director for Sun Microsystems.

Speaking at the Technology Partnering and Investment Forum in London, Adams said: "Many customers have likened licensing to an extra tax on the business."

The development of open source has given users more choice, but vendors still need to do more, she added. Sun's Java System products have been licensed on a per-employee model since last year.

Steve Garnett, general manager and vice president of application software provider Salesforce.com, said models were 20 years out of date.

"Traditionally, companies have paid for software in upfront licences. Not many industries get away with selling in that way," he said.

Salesforce.com delivers its software via the internet, charging according to user numbers.

Edward Hyde, Microsoft's enterprise channel head, agreed that changes to licensing were inevitable. But he said: "There will [have to] be a balance between choice of simplicity [of models] that will grow according to demand."

Hyde added that if companies preferred to lease their resources - like office space, for example - then the same option should be available for software.