Computers are being redesigned to make them cheaper, but the software licensemodel is not following suit and could mean huge cost increases for enterprises and individuals, a survey found on Monday.
Four major changes in how computers are designed are underway and few software makers are preparing for it, research group Gartner said in report.
"The fact that all four are happening at the same time is a recipe for software pricing mayhem," said analyst Alex Bona.
Software makers currently charge consumers and companies per individual user of their product.
New computers, however, have two or more processing cores to make it easier to execute simultaneous tasks, such as streaming Hi-Fi music while working on a spreadsheet. For many software makers, two cores means two individual users.
Software makers may continue to license their software per single microprocessor core, ignoring the fact that two cores do not make a computer twice as productive and that they may still used by a single person, Gartner said.
"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," Gartner said.
Companies like Oracle, IBM, Microsoft, Sybase and many other software companies base their licences on hardware capacity or central processing unit.
The majority of software vendors surveyed by Gartner are intending to charge the current microprocessor fee for each core on the chip. Only a few software companies, such as Microsoft and BEA, have already acknowledged that dual processors does not mean computers will be twice as powerful, and have said they will not increase, or at least limit, licenseincreases.
Three other developments, however, are less understood. They will change the way software is being used by enterprises. These developments allow companies to shift computing power on demand.
Software vendors have not yet adapted their business to a future where software is used more intensively over multiple computers over shorter periods.
"No mechanism is in place for software vendors to measure when and for how long these temporary processors were active. Consequently, potential savings in hardware can be eliminated by rising software fees that are based on the total potential system capacity," Gartner said.
"Any one of these trends would present a great challenge to software vendors to maintain a fair and acceptable pricing policy," Bona said.
"It is therefore crucial for enterprises to understand the risks and protect themselves by starting contract negotiations with their vendors now," he added.
