IBM changes per-CPU licensing, but not enough

From Ed’s blog, news that IBM is moving toward a slightly different licensing strategy for its products.

Why does IBM even use per-processor licensing? Customers hate it. Microsoft has been making hay in the database world by showing the license cost differential between SQL Server 2005 and DB2 on equivalent hardware– it can be up to an order of magnitude difference! That gets CxOs’ attention PDQ.

Doesn’t it make more sense to price software according to the number of actual clients or users and not the capacity of the machine? As I understand it, if I buy a 2-CPU dual-core Opteron server, I have to buy 4 Domino CPU licenses (or the equivalent number of “processor value units”), no matter how many actual users connect to the box or what else it’s used for. Compare this with the pricing model for Exchange, GroupWise, or even OCS: you pay for the number of users you’re supporting, not for what your hardware is potentially capable of.

“Processor value units” seem like an IBM attempt to extract money that they wouldn’t otherwise be entitled to from customers who are moving to multi-core CPUs. When Ed asks:

…what would you like to see happen as far as sub-capacity or multi-core licensing and pricing for Domino? ..t. If the answer is “we just want to pay less for Domino”, that dog doesn’t really hunt — unless you have an idea how that translates into IBM growing and maintaining the Domino business.

one translation of the question might be “customers, we know you think our license model doesn’t reflect reality, but we don’t care if you want to pay less.” The right thing to do for growing the business is to adopt the MS model for virtualization licensing: license per active instance and virtual CPU, not for physical instances of anything.

(and before the flames start: yes, I know MS has per-CPU licenses for some products, like SQL Server. However, AFAIK they don’t do per-CPU licenses for their messaging and collab products; I don’t know offhand if they’re doing per-CPU or CAL for Office SharePoint Server or not.)

Update: yep, customers hate IBM’s licensing model, all right.