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Microsoft to raise NT pricing

The NT Server 4.0 Enterprise Edition will cost more, but Microsoft says it's still a bargain compared to Unix.

A new enterprise version of Microsoft's (MSFT) Windows NT Server 4.0 will probably cost more than the current offering but still undercut comparable Unix pricing.

A new Enterprise Edition of Windows NT Server 4.0 is scheduled to ship next quarter and will include support for eight-way SMP (symmetric multiprocessing) server machines, transaction and message-queuing servers, and Microsoft Cluster Server, a still-unreleased technology previously code-named Wolfpack.

Windows NT 4.0 Enterprise Edition will be priced at $3,999 for a 25-user license, according to a report submitted by server hardware maker NCR to the Transaction Processing Performance Council, which tests how fast software runs on selected hardware set-ups.

Microsoft confirmed that the $3,999 price tag is correct but stressed that it is tentative. "That's not really the official price," said Enzo Schiano, group product manager for Windows NT Server at Microsoft. Official pricing is expected to be disclosed later this year.

If Microsoft sticks with that price, however, then corporate users will soon be paying more for NT.

On the face of it, the new price appears to be a steep increase from the roughly $2,800 that companies now pay for a 25-user version of Windows NT. Current prices for the core Windows NT Server 4.0 operating system are typically around $899 for a five-client license.

But NT Server Enterprise Edition includes significant new features, such as support for up to an eight-way multiprocessing server, along with built-in clustering support, Schiano said. This upgrade is intended specifically for large companies that plan on supporting hundreds or thousands of users.

Schiano argues that, even with the price increases, the new version of NT is a bargain compared to Unix server operating systems. "There's no question the price for the Enterprise Edition will be higher than the core operating system," he said. "It just has so many high-end features."

"It's still much lower than anybody else," Schiano said. Some analysts agree.

"SCO has enhanced versions of its [Unix] operating system priced between $14,000 and $17,000," said Dan Kusnetsky, an analyst with International Data Corporation. Digital Equipment, Hewlett-Packard, and others charge similar prices, Kusnetsky notes.

"Since it will allow enhanced work, it's no surprise that they would raise prices," Kusnetsky said. "The increase will be accepted by users if they deliver appropriate performance," he said. "Users generally do not react well to price increases. But [Microsoft] was thinking that, since they would add features, they should raise prices. It makes sense," he said.

Schiano said additional per-user licenses for NT Server Enterprise Edition are expected to cost roughly $39.95 for new users and $24.95 for those upgrading from the existing version.

While Microsoft claims to still be cheaper than its Unix competitors, some of them are eager to compete harder on price.

Sun Microsystems just announced the latest version of its Unix-based Solaris operating system priced at $695 with no user license fees. That offer is a temporary promotional price only, but Sun officials have made it clear that they will bring their pricing model in line with NT. Other Unix-based companies are expected to follow suit.