IT licensing is, sadly, almost never straightforward, and large companies often have dedicated staff to hammer out the best deals and pull out all the fishhooks.
Meanwhile, vendors are busy coming up with new ways to “simplify” these legal contracts by which you can use their products.
Licences may be priced on a flat-fee, per-user, per-processor, per-server, “points” or any other basis. These days, often when you purchase software, a software maintenance agreeement is part of the deal. You may effectively be negotiating three pricing elements: software licensing, technical support and maintenance. A software maintenance agreement gives you access to all the latest modifications and fixes to for a set annual fee per licence.
If you were wanting to compare licensing regimes of the big software vendors you might suppose the database market would be a good place to look. Microsoft, IBM and Oracle all feature large in this segment of the software business, which is worth billions of dollars. But comparing apples with apples turns out to be a near-impossibility. Wayne Jackson, director of Wellington-based software consultancy Accordo, has tried several times without success.
Oracle is happy to name numbers, especially if they put the software giant in a good light. On the basis of recent changes Oracle claims the rival IBM DB2 Enterprise Edition is 65% more expensive than Oracle9i Database Enterprise edition and says IBM’s Websphere is seven times more expensive.
(IBM rejects Oracle’s claims, saying its WebSphere Application Server 4.0 Advanced Edition is less expensive than the comparable version of Oracle 9iAS. Big Blue's own comparison is here).
Oracle is pushing its new per-processor licensing model over its older named-user model, but says organisations will never be forced to migrate their licences. Oracle offers three licences: a perpetual licence that never expires, a four-year and a two-year licence. When a licence expires the user has to buy a new licence at current terms. In addition maintenance and support fees are charged at 22% of product licence prices.
Current licences can also be mixed with the “universal power unit” licences that were withdrawn on June 15 last year. Existing contracts will be honoured, says Oracle.
The company also offers a flat-fee pricing scheme, which involves companies having to standardise on Oracle’s 11i e-business suite, a $US250,000 minimum purchase and buying software licences for at least 20% of their workers to qualify. At least one local user is open to the plan (see Oracle user open to flat-fee licensing plan).
IBM offers a variety of licensing options, dependent on its software products sold under its Lotus, Tivoli, Websphere and data management lines. IBM NZ signs customers up under its “passport advantage agreement” which registers purchasers at different pricing levels depending on the type and volume of software they wish to purchase.
The Microsoft website offers a range of licensing options including Software Assurance and its accompanying “License 6.0” scheme. No prices are given.
Computer Associates, in comparison, offers an open licence programme (OLP), master licence programme (MLP) and government licence programme (GLP). The first is for any-size organisations, the second for larger companies. Under the OLP and MLP each product and service has a point value. Under OLP 40 points or in an initial order automatically qualifies users for participation in the programme for two years. The high-volume MLP promises significant discounts. See CA.