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Software Licensing Cuts - Database Weekly (Mar 16, 2009)

By Steve Jones,

Software AssuranceI saw an article earlier this year that talked about how the economic downturn might lead to less software purchases this year. It also mentioned that some software companies might look at stepping up enforcement of their licenses to ensure that their profits didn't tumble. Thankfully I haven't seen reports of any company doing this, but you never know as sales continue to fall.

This week I noticed that Microsoft is taking a different approach, at least with some of their software. They're offering discounts on Software Assurance (SA) contracts, including  CALs for server software. The idea is to retain customers that might be thinking of dropping the maintenance to reduce their costs. Many larger companies that have Enterprise or Open license agreements are required to keep SA, which can be expensive.  This move helps to lower the chance that Microsoft would lose those agreements from their larger customers.

Along with what seems like the shortening of release cycles for all products to fit inside the SA windows, this is a good idea. Sacrifice some short term profits and deliver more value for your customers. My guess is the push to get Windows 7 out by November is to fit in inside the 3 year window that many SA agreements used to cover. I'm not sure if that's still the timeframe, but it was a complaint for many SQL Server 2000 customers that purchased SA and didn't get a new version covered in their agreement.

I've always felt that software licensing wasn't the major cost of using software in most environments, but that doesn't mean it's an insignificant cost. Every company still needs to evaluate the benefits and costs of any licenses to determine what best fits their situation.

For SQL Server this means the cost of CALS declines a bit, but the cost of those server licenses doesn't change. However with the new capabilities and power of SQL Server 2008, you might want to do some checking to see if you can consolidate databases onto fewer servers, possibly saving some licensing in the future.

Steve Jones

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