Why is there software licensing by the core?

Stephen Shankland is reporting that Oracle has quietly cut database prices on some low-end servers using multicore processors.

It's clear that Oracle's move is because Microsoft doesn't charge that way and is making some database inroads. With any luck perhaps Oracle can be prodded to drop increased software charges for all applications running on multicore processors.

Why? It just doesn't make sense. Multicore processing is a hardware advance. Why should you have to pay more for your applications just because they run faster. More usage? It's a weak argument. Intel and AMD invest in the R&D and software vendors get to charge more. Great deal if you can get it.

Charging more for software because it runs on multicore chips means the following: As you upgrade your hardware infrastructure you get whacked with higher software fees.

Does that sound fair? According to Yankee Group analyst Laura DiDio, software licensing should be based on the number of processor sockets--not the cores. Microsoft is the good guy in this one with Oracle sticking to its multicore story. DiDio says IBM also will do the multicore licensing scheme, but back off if you have enough heft.

"Vendors are responding to demands for more power and better performance by messing with their licensing," says DiDio. "Microsoft took the high ground here. A multicore licensing model is going to have a big impact--especially as virtualization takes off."

I don't get the rationale for charging by the core for software. And comment from software makers is hard to come by. Nevertheless, customers may want to examine how they are being charged for multicore processors.  Customers I've contacted have seemed pretty reticent about commenting on multicore software licensing models.

Perhaps these folks should speak up. After all, multicore licensing may explain why software costs are going up more than you expected.