Core values

Software pricing in the age of multicore and virtualization

Easy terms

Eyeing that HP ProLiant 300 server with the quad-core Intel Xeon processor, thinking it would be perfect for running one of your hefty enterprise applications? Maybe it will, but you might have to pay more for the software. Here is how software companies that charge by the processor would count that quad-core chip.

Company - Processors

Microsoft - 1

BEA - 1.5

Oracle - 2

IBM - 2

Two times two does not always equal four. At least not in the complex world of multicore chips. In the world of software licensing, it could sometimes come to one. Or two.

As Intel and Advanced Micro Devices double the number of cores on their microprocessors from two to four, agencies using these new chips will be able to run software several times faster. But software costs ' at least for the software companies charging their customers by the number of processors their software runs on ' could also increase, even if, technically, a four-core processor is still only a single processor.

'Companies charging per processor deal with multicore in different ways: It all boils down to the definition of a processor,' said Julie Giera, vice president at Forrester Research.

Complicating licensing schemes even further is the advent of virtualization. Say, for example, that using virtualization, you run four separate copies of software on one server. Should you pay for four copies of that software, or just one?

Multifold aspects

One thing is certain, the multicore era is upon us.

Multicore chips pack significant extra power into the same silicon real estate.

Many computers already have dual-core chips ' with two processors per chip ' rather than the traditional single core. Additionally, new models of quad-core chips ' with four processors each ' are already expected from both AMD and Intel, with 8-, 16- and 32-core versions on the drawing board for the years ahead.

AMD and Intel have designed their quad-core chips to fit into the same slots as existing processors. In addition, these new quad-core chips have power requirements similar to previous models ' and produce comparable heat. The upshot for agencies is that they can upgrade their single-core and dual-core computers simply by replacing the chips with quad-cores. Even with no other changes, the resulting computer can become several times faster ' depending on the type of applications running ' in the same cabinet footprint. This is extremely attractive to agencies with many racks of servers, because a comparatively modest investment can yield a tremendous increase in processing.

So far, the advent of quad-core chips seems like unalloyed good news. The picture is not uniformly rosy, however. Software licensing often depends on the number of processors being used.

This means that the transition to quad-core chips ' indeed, to any multicore chip ' may, therefore, entail unexpected software licensing costs. It's important for agencies to be aware of the variety of software licensing policies.

These policies range from the simple to the complex, from those that are set to those that may change, and from those that cost your agency nothing to those that may increase licensing fees a great deal.

Microsoft is one software vendor whose policy is simplicity itself: one socket, one license, period.

'Microsoft's pricing treats each socket as identical, regardless of the number of cores,' said Rob Campbell, senior technology specialist at Microsoft. This means agencies can upgrade to quad-core chips in the same socket with no impact on their software licensing whatsoever.

'The goal of Microsoft's policy is simplicity,' said Joel Yoker, senior consultant at Microsoft.

Microsoft originated this policy in 2004 to deal with the advent of dual-core chips. As a result, most agencies' current licensing probably already contains this policy. This makes planning for agencies simple: As long as agencies don't add sockets, the number of cores on their chips won't affect Microsoft's pricing at all.

VMware's software licensing policy deals with chips currently available: single-, dual- and quad-core chips. VMware treats each of them the same, with the same pricing. This means that agencies can upgrade to quad-core processors with no impact.

However, the company makes no guarantees beyond eight-core chips.

'VMware will evaluate new chips in the future and make decisions then,' said Bogomil Balkansky, senior director of product marketing at VMware.

Moving up the ladder a notch in complexity is BEA Systems' policy, which takes into account both the number of cores on a chip and the fact that there is an immense installed base of single- and dual-core processors out there.

BEA spots you the first two cores: You pay the usual rate for single- and dual-core processors. After the first two cores, BEA pricing increases by 25 percent per core. So, for example, software running on a quad-core chip, with two cores more than the threshold of two, would cost 50 percent more.

'BEA developed this policy a couple of years ago,' said Guy Churchward, vice president of WebLogic products at BEA. 'We're on top of the multicore trend.'
BEA also offers prepriced licensing that is valid regardless of the CPU or the number of cores.

Oracle prices software in one of two ways ' by user or processor. For multicore processors, the company has mapped a licensing policy that includes the number of cores per chip and something called a processor factor, which is based roughly on how much performance each core offers in relation to the processor as a whole.
For instance, all single-core chips have a processor factor of 1. UltraSPARC T1 eight-core chips have a processor factor of 0.25, AMD or Intel quad-cores have a processor factor of 0.5 and all other multicore chips have a processor factor of 0.75. So, for example, the total pricing multiplier for an AMD or Intel quad-core would be 2 ' 4 cores times a processor factor of 0.5.

Despite the granularity of this pricing model, Oracle maintains that customers actually come out ahead by using multicore processors, noting the higher performance of dual-core chips.

IBM has done a great deal of work to define its software licensing policy in detail with respect to the processing power of chips. The company, like Oracle, has created its own metric for evaluating processors, which can take some getting used to.

First, IBM sets the power of a single-core chip as 100 Performance Value Units (PVUs). Then, IBM assigns a PVU value per core for all the most common chips. The results are summarized in a table (See

Consulting this, you can see that, for example, an Intel quad-core has a value of 50 PVUs per core, for a total of 200 PVUs, meaning twice the cost of a single-core chip. The operating system and specific application do not matter. However, agencies will need a thorough inventory of their specific chips to use this information to determine pricing.

'IBM has had this policy in place for about a year,' said an IBM spokesperson. This policy does not apply to agency contracts established before then. When new chips appear, IBM will perform testing, assign them a PVU value and add them to the table.

The value of virtualization

Just as multicore processors raise the question of how many processors you should license your software to run on, virtualization raises a similar issue: If you run multiple instances of a single program on a single server, how many of those copies must you pay for?

The answer, however, is much simpler than you might think ' or might hope for if you do procurement. With many companies, you will pay for each copy of the program you run, virtual or not. Some companies are exceptions to this rule. For instance, Red Hat Enterprise Linux Advanced Platform lets you run unlimited additional copies of the operating system within virtualized containers. But most companies are stricter: Sure, you could run four copies of Windows Server 2003 on one machine. But you'll have to pay for each of those copies.

Virtualization is a concept closely related to multicore chips. The basic idea is that a single physical resource can appear to operate as multiple virtual resources. For example, a single physical server can operate as multiple virtual servers.

Clearly, virtualization is a lot easier to accomplish with multicore chips, because each of the cores could run something different. But virtualization goes beyond even one virtual server per core: Each core can be running multiple virtual machines.

Using virtualization, computing can become more efficient. All those wasted processing cycles ' the dreaded underutilization of computing resources ' can be put to use as virtual machines, supporting multiple processes, applications or users. This lets agencies do more with less hardware. 'Server consolidation is a primary use case,' Balkansky said.

VMware, which specializes in virtual machines, sees an increasing number of virtual machines as the number of cores increases. 'With multiple virtual machines running, you can have multiple applications on each physical server,' Balkansky said. This makes multicore chips even more attractive to agencies. A little planning may be necessary to keep identical processes from accessing the same resources simultaneously.

Microsoft offers virtual products for its operating systems ' Virtual PC 2007 and Virtual Server 2007 ' that run multiple instances on one piece of hardware. Both of these products are free for any valid Windows license. They use excess processing power to offer multiple virtual platforms for users. This is especially useful during development, where a single physical system can simulate multiple systems.

The Windows 2003 Enterprise Edition also allows as many as four virtual guests for each valid copy. Similarly, Windows Vista Enterprise Edition offers two virtual guests, and Windows Server Data Center Edition permits an unlimited number of virtual guests. Most agencies are not aware of these free offerings.

Wonderful, right? Yes, but the tricky part for an agency ' or a vendor ' is: How do you count all this? Do you count by the number of virtual processes? By the physical properties of the chip? By the number of users? By the number of concurrent instances of the software? It's a problem that vendors are still developing answers for.

Luckily, this problem has been solved before. If virtualization sounds familiar, it's because this concept first came up in the 1960s. 'It's very much like mainframes,' Churchward said. As discrete, separate computing resources turn into a virtual cloud, agencies can offer flexible, high-utilization solutions to their users.

Agencies will need to deal increasingly with multicore chips ' and their intricacies ' in the future. 'The trend is for more cores from the manufacturers, and more widespread use of virtualization in the IT organization,' Giera said. Agencies can and will make sense of software licensing complexity and profit from the benefits of multicore chips.

Edmund X. DeJesus ( is a freelance technical writer in Norwood, Mass.

inside gcn

  • Four horsemen of fed IT slowing cloud adoption

    Four horsemen of fed IT slowing cloud adoption

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group