Microsoft Rethinks Server Pricing

SAN MATEO (06/12/2000) - Microsoft Corp. on Monday announced that it is rewriting its licensing terms for server applications in an effort to broaden the products' appeal among Internet users.

The new licensing model, which will charge customers on a per-processor basis, will take effect with the next release of Microsoft's servers except for Exchange 2000, which is keeping its existing pricing model. Microsoft in the past has charged customers on a per-user basis.

"It's difficult to understand Microsoft licensing policies, and to comply with them can be a real pain," said Barry Goffe, a group product manager for SQL Server. "For example, the Internet connector licenses are different between SQL Server and Commerce Server."

Competitors IBM Corp. and Oracle Corp. introduced per-processor licensing last year, Goffe pointed out, and Microsoft customers urged the Redmond, Washington company to take a similar approach.

The move also makes sense as customers look to conduct more business on the Web, and Microsoft aims to facilitate that move with its Windows DNA 2000 line of technologies. Those products include SQL Server 2000, Host Integration Server 2000, BizTalk Server 2000, Commerce Server 2000, Internet Security and Acceleration Server 2000, and Application Center 2000.

"Our licensing model doesn't work for Internet applications," Goffe said.

Most small and midsize businesses won't see much of a change in the overall cost of the server applications, Goffe said, but larger companies would end up spending more money implementing SQL Server 2000 Enterprise Edition.

Microsoft Corp., in Redmond, Washington, is at www.microsoft.com.

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