Feeds

Enterprise software faces 50 per cent price hike

Gartner says talk to vendors now...

  • alert
  • submit to reddit

Security for virtualized datacentres

Underlying technology trends could push software licenses for enterprise applications through the roof, according to Gartner.

The analysts say that licensing models used by IBM, Oracle, Sybase and other vendors which are based on hardware will increase by at least 50 per cent by 2006 unless they are renegotiated quickly. Licensing for such applications is usually based on the processing power of the box the software is installed on.

But the move to servers with more than one chip could land businesses with a big bill. If an application currently costs $40, 000 per CPU then a dual-CPU system will cost $80,000 - a 50 per cent improvement for twice as much money.

Alexa Bona, research director at Gartner, said: "The current licensing model does not give software vendors an incentive to write more efficient code. It also leaves users unable to control costs when single core systems become unavailable, perhaps as early as year-end 2006. By that time, many enterprises will pay at least 50 percent more in software fees from a number of mainstream software vendors that currently license based on CPU."

Other trends likely to push fees higher are use of virtualised hardware resources and capacity on demand machines. Virtual machines use partitioning to divide a chip up so different parts run different applications. But many vendors do not recognise this so business end up paying for using the whole chip even if they are only using a fraction of it.

Capacity on Demand systems face a similar problem. Such systems contain more processing power than a business typically needs so the extra processors can be switched on when they are needed. But again software vendors typically charge for total potential capacity rather than what is actually used.

Gartner recomends business takes urgent action because by the end of 2006 single core systems will not be available. The analysts say companies should start talking to software vendors now to get policies changed. In the longer term they call for standards that "would permit a proper long-term restructuring of software pricing". ®

Related stories

Oracle moves to quarterly patch cycle
Big.biz struggles against security threats
Microsoft spruces up Navision

Providing a secure and efficient Helpdesk

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
IBM storage revenues sink: 'We are disappointed,' says CEO
Time to put the storage biz up for sale?
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.