Novell reduces Web services pricing

Novell Inc. launched a discount licensing program last week that could save network professionals money deploying Web services applications for their organizations' customers.

The new license format will make Web services, including activities such as accessing bank accounts or government records, more affordable, Novell says. Novell's licensing plan is based on the number of individual users of a software service, as opposed to the number of computing devices connected to the network. The idea is to let companies and government agencies avoid paying licenses for each PC, PDA or other devices that one user may use.

To fix that inequity, Novell has defined a new type of user and adopted pricing called Business-to-Consumer and Government-to-Citizen to fit them. US Government agencies will pay only 10 percent of the cost of traditional user licenses for citizens accessing its Web services. Private business will pay only 25 percent of what they are charged now for customers. The license programs do not apply to an organization's employees, suppliers or outsourcing companies.

"[Business-to-Consumer] and [Government-to-Consumer] recognize a different class of user," says William Mahler, director of pricing at Novell. "Today's models have one definition of a user - an employee. Organizations are unwilling to pay $10 a user for an application, such as iChain, for a customer who never uses the Web."

Analysts say Novell's pricing model is smart.

"As companies move to Web-centric computing, they need to look at who is touching their applications. There are people who look up something and never come back to the Web site again," says Dan Kuznetsky, an analyst at IDC.

Most vendors that provide Web services do not differentiate between types of users. Microsoft Corp., BEA Systems Inc. and Systinet Corp. price their Web services software offerings by the number of CPUs hosting or using their software. For instance, a customer might be charged a license for each computing device from which a user accessed its services, whether a notebook, desktop computer or PDA. Even Novell previously negotiated Web services licenses for the number of users irrespective of how often they accessed services.

Novell's Web services licensing applies to any of the company's products that could be offered for user consumption. For instance, when a customer of a bank wishes to access his checking account balance online and transfer money, the bank needs to use a variety of software to process the user's transaction. It might use Novell's eDirectory, iChain and eXtend XML integration software to identify and authenticate the user, transfer money, display balances and back up the customer's transaction.

Mahler says for users to benefit from Novell's licensing, companies need to know how static their customers are and the applications they need to access. If a company has a number of transitory customers, it can move the licenses from customer to customer as required until it needs more licenses.


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