Sybase: Multicore software pricing a moot point
Conventional wisdom has it that software companies, accustomed to charging license fees on the basis of how many processors are in a computer, are struggling with the arrival of multicore processors. Companies such as Oracle or IBM want to charge per processor core now that multiple processing engines can be crammed onto a single slice of silicon, or in the case of Intel's new Xeon 5300 "Clovertown" processor, into a chip package. Some companies charge per processor socket, while others persist in charging per processor core.
But according to one software executive, the market is one step ahead of conventional wisdom. It's already decided per-core pricing is a thing of the past, said Mark Westover, Sybase's vice president for corporate development. Westover's comments came at an Intel conference in San Francisco on Tuesday to discuss software issues raised by multicore processors.
"We studied the impact of dual-core and how did dual core affect how we priced. Our strategy for dual-core was 'we're going to count each core as a CPU.' We didn't change our price at all," Westover said.
"We watched to see what happened. Did the sales force actually apply an incremental discount to that, because there's a perceived discount in the customer's mind? The answer was yes," Westover said.
Sybase then measured pricing and found that the sales force discount matched prices of those who'd changed their prices, Westover said. The next question is whether Sybase should formally change its prices, or just let the market forces handle it, he said.
"Now that we have quad core and anticipate many more cores coming down the line, we're in the process of evaluating how we respond. On the one hand, there's part of me that says we absolutely have to respond. We have to adapt. There's no question this is an inflection point for software pricing models, and we need to change," he said. "However, I love the fact that the market adjusts for itself anyway. Maybe we really don't have to do anything because the sales force has implemented a policy that's fairly well in line with everybody else."