Microsoft is re-examining its software licensing policy to meet user demand for usage-based pricing.
Microsoft applications are usually licensed by the number of users who log onto a server. Buyers have to anticipate the number of users, but with Internet-based applications this demand can fluctuate wildly.
This week the company said it will begin pilot projects with US Internet service providers (ISPs), in which the BackOffice suite is priced according to both the number of servers and the actual amount of use, allowing a potentially unlimited number of users.
This allows ISPs to rent applications over the net. The move effectively introduces software metering to Microsoft products. Phil Cross, UK business systems marketing manager, said Microsoft will evaluate if the model is suited to SQL Server, Exchange, SMS, and Windows NT for Internet-based services.
Microsoft led the way last month with revised Windows Terminal Server licensing for non-Windows clients.
Oracle has been talking to its UK user group over concerns about the flexibility of its software pricing. The user group, which has been calling for usage-based pricing, will this month poll its 1,300 members for their views. Vice chairman Ronan Miles said: "We are encouraged that a company the size of Microsoft can respond to its customers on software licensing."
Rob Hailstone, research director for Bloor Research, said changes to the software giants' licensing policies are inevitable. "As the technology evolves, people use it in different ways. The old pricing models are outdated," he said.
Hailstone predicted it would nevertheless be some time before full-blown Internet-hosted applications services are available.
Some organisations are sceptical about Internet-based services. Charles Patey, infrastructure planning manager for Homebase, said he would not use core applications hosted on the Internet unless security was adequate.
Additional reporting by Steven Mathieson, Computing.
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