"Hell, I don't know how to bill"

Andy Dornan examines the impact of virtualization and multi-core processors on software licensing models, with significant implications for data center consolidation projects that use these technologies. Article is a bit long, so I gist it for you.

Licensing savings were one of the main arguments initially made in favor of application streaming, the first desktop virtualization technology aimed at the enterprise. Vendors like Softricity promised that centralizing applications on a server, instead of installing them on every desktop, would mean fewer required licenses, because apps would need to be licensed only for the number of people actually using them at any given time. That savings pitch fell by the wayside, however, once Softricity was bought by Microsoft.

Now the traditional licensing model is threatened again. Multicore processors and virtualization are nails in the coffin for standard software licensing models, but there's no agreement on a replacement. And the problem isn't confined to the data center. Licensing issues have already slowed development of Intel's virtualization technologies aimed at desktop management, while Microsoft is using desktop virtualization as a way to drive adoption of its Software Assurance subscriptions.

While it's tempting for enterprise IT to chuckle at this state of affairs, you need to pay attention: Alternative licensing schemes range from the familiar, like open source and SaaS, to untested models like pricing based on memory or virtual cores. At best, they could mean lower costs and more flexibility.

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But let's be real--when have software vendors embraced low costs and flexibility? Worst case, the hardware savings from the server consolidation that virtualization enables will be gobbled up by software licensing charges....

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