Software Licensing and the CIO

Want to see veins pop out of a CIO’s forehead? Talk to him about software licensing. According to CIOs, licensing policies are all too often written to reflect value for the software maker—not the customer.

That started to change several years ago when tech spending dried up. CIOs took charge of the buying process, and licensing policies now more often reflect customer value.

But another wrinkle has worked its way into the licensing tug-of-war. And it has nothing to do with software. Earlier this year Advanced Micro Devices and Intel began to ship what are known as dual-core processors. According to Wikipedia, a dual-core processor is a CPU that “combines two independent processors and their respective caches and cache controllers onto a single silicon chip.” It is really two chips in one. Two chips on one tiny piece of silicon, making a CPU that consumes less energy, produces less heat and, according to The Economist, is 30 percent to 80 percent more powerful than traditional single-chip CPUs.

Computer hardware running dual-core processors costs more, but that’s to be expected. The thornier issue for dual-core processors is with software vendors who often base their licensing fees on the number of CPUs a customer is operating. You see the problem. Is a computer with a dual-core processor one machine or two?

This is where it gets confusing. Dual-core CPU software-licensing policies are all over the map. Some vendors charge a 75 percent premium on a dual-core machine. Others up your ante by 25 percent. And still others view a CPU as a CPU regardless of whether it contains one or two processors. Makes life interesting, doesn’t it?

A possible solution is licensing per socket. A socket is the connector that interfaces between a computer’s motherboard and the processor itself, so in this scenario, a dual-core processor would constitute one CPU.

What’s your take? What’s the fairest way to figure this out? Send me your ideas.

Gary J. Beach, Publisher

gbeach@cio.com