Glorifying ephemera

I see that IBM will treat dual core CPUs as one chip but I agree with Tim about his one. As I have been saying in my keynotes for about a year, pricing that's based on the ephemera of implementation is senseless in a massively-connected age when the network is the computer. Who cares how you achieve your results? What matters is that you can deliver those results.

Pricing in a massively-connected era can't be based on licenses to use particular bits of software, on how much memory you've installed, on the kind of CPUs you've selected or indeed on any arbitrary ephemera, because increasingly there will be multiple equivalent ways to achieve the same results - from self-built Unix installations all the way to rented time on utility computing services. It makes no more sense to charge per-CPU than it does to charge per-memory chip. it's like the electricity company charging for electricity based not on what you use but rather on how many filaments you have in your light bulbs (and woe betide if you install fluorescent!)

We're in a transitional phase, and IBM's move is a step forward (come on, Oracle, everyone is waiting), but it's time end users started pressuring suppliers to move their business models into the massively-connected 21st century, before open source and innovative silicon wipe them out.

Comments:

I agree. Oracle is particularly frustrating in this area. Oracle sells you exactly the same software but adds a 100% markup for every extra CPU in your server. Essentially the price you pay is based on your capacity to utilise their IP. It is the same IP that you run on a single CPU but the price scales linearly as you add a CPU. Oracle will move at the absolute last second on their pricing model. We saw this with their attitude towards SQL Server. We will see it with multicore CPU pricing. Unfortunately, this is all driven by the shareholders. They demand profits and dropping prices usually means lower profits. Many companies could learn from the per-employee pricing from Sun. A consistent, cheap and managable costing model. Imagine paying per-employee and getting the ability to install the Oracle software stack on any and every server you have under your control, without restriction. The story will be very different without an Oracle wakeup call.

Posted by Aaron Browne on May 09, 2005 at 09:06 PM PDT #

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