Microsoft multi-core move makes licensing waves

Microsoft's recent decision not to charge additional licence fees for multi-core processor technology will save customers money and could force competitors to reconsider their own licensing strategies, according to Gartner.

In a recent advisory Gartner analysts Alvin Park and Jonathan Mein praised the software giant for its 'pre-emptive move', which means that Microsoft software licensed on a per-processor basis will continue to be licensed that way when installed on hardware containing dual-core and multi-core processors.

The report noted that both AMD and Intel plan to deliver dual-core processors, with two processing execution units or cores on one chip, for server hardware in 2005.

It predicted that a progression from dual-core to multi-core processors will occur soon thereafter, and that the technology is likely to spread to workstations, where it and its licensing costs will affect even more companies.

"Two or more cores on a single chip could increase the software licensing costs that customers will have to pay," stated the Gartner advisory.

"Until now, several of Microsoft's competitors have defined a 'core' as being identical to a 'processor', and therefore have indicated that dual-core processors will require two licences for each processor, doubling the software licensing cost."

Although software vendors have not specifically mentioned multi-core processors, before Microsoft's announcement the implication had been that each core would require its own licence, said Gartner.

According to the analyst firm Microsoft has made the move - just as it did not charge more when moving from 286 to 386 to 486 architectures - because it removes software licensing barriers to the adoption of multi-core processors.

"In the short term, this decision will likely cause Microsoft to forgo some licensing revenue. However, Microsoft could be seen as a software licensing leader and improve its future software licensing revenue," said the report.

"Microsoft's stance on dual-core and multi-core licensing will help it rebuild trust with its customers following the problematic Software Assurance introduction of 2001, and force Microsoft's competitors to re-evaluate their own approaches to dual-core and multi-core licensing."

Microsoft's customers should, according to Gartner, exploit the licensing policy in software contract negotiations with Microsoft competitors.