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AMD has urged ISVs to re-examine their software licensing policies for dual-core systems, the same day IBM reportedly said it will pursue separate policies for x86 and its own Power5 processor.

While Oracle has declared it will treat dual core chips as separate processors, and price its software accordingly, Red Hat, Sun Microsystems and Microsoft have pledged to treat multi-core chips as a single product.

Ben Williams, an AMD vice president, said Thursday the software industry "really has to take a hard look at licensing" as chip manufacturers go beyond dual core.

Williams was speaking the same day AMD launched its first dual-core Opteron processor. "Dual core is only the beginning. We have multi-core chips and more and more virtualization coming," Williams said.

AMD's comments came as an unnamed IBM representative told told CNet that IBM would treat dual core x86 processors as a single chip, because the chips provide only "incremental" advances.

However, IBM will charge per core on Power5. The company justified the move saying its processor - used in the pSeries servers for Unix and Linux - featured more advances and that software would need to be optimized accordingly.

The change comes after IBM had said it would price its software for each core on x86 separately. IBM was unavailable to confirm the new policy at the time of going to press.

The move, though, would seem to be geared to protecting the company's software income on the pSeries. Overall, sales of WebSphere, DB2, Tivoli and Lotus software last year accounted for 15.7 per cent of IBM's revenue compared to 32.3 per cent for hardware. Software, though, produces a greater margin, with 87.3 per cent gross profit for 2004 compared to hardware's 29.6 per cent.

Last year, analysts at the Gartner Group warned customers could see their software licensing costs double within two years as ISVs charged per core instead of per processor. Garter said server virtualization and computing-on-demand strategies would also help to drive-up software licensing.®

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