How Multi-Core Technology Will Influence Traditional Models of Software Licensing

1. How Multi-Core Technology Will Influence Traditional Models of Software Licensing Margaret Lewis AMD Commercial Solutions Strategists

2. Virtual Machine Virtual Machine Virtual Machine Software LicensingTechnology Pressures • Technology trends are pushing against the boundaries of traditional software licensing • Multi-core processors • Virtualization • Grid computing

3. Software LicensingUser Pressures • Users continue balk at significant increases in software costs for emerging technologies • Many ISVs are resorting to one-off licensing to address user concerns • Industry continues to debate software licensing models

4. Why Multi-Core Technology? • More performance without increasing costs • More CPU horsepower in smaller footprint • Smaller form factor provides more CPU capabilities • Industry-standard server provide the capacity of high-end proprietary servers • Better leverage existing infrastructure • Increased performance with same power requirement as single core • More servers per rack

5. SPECweb®99_SSL 4P server with AMD Opteron™ Model 875 7538 4P server with Itanium2 1.6 GHz 9MB L2 cache 4986 2P server with AMD Opteron™ Model 275 4240 4P server with Xeon 3.33 GHz 8MB L3 cache 3732 Why Multi-Core Processors? More horsepower for less space and power • 2P Dual-Core AMD Opteron™ processor-based server out performs 4P single-core server • 4P Dual-Core AMD Opteron™ processor-based server has 2x the performance of a 4P single-core server

6. Why Multi-Core Processors? Increases performance without increasing infrastructure costs IDC believes that dual-core processing could accelerate workload shifts from mid- and high-end systems to entry- or volume-server-based platforms Vernon Turner, group vice president and general manager of Enterprise Computing, IDC http://www.egenera.com/display_pr.php?id=218

7. CPU CPU CPU CPU CPU CPU 8 GB/S SRQ SRQ Crossbar Crossbar Mem.Ctrlr Mem.Ctrlr HT HT 8 GB/S 8 GB/S PCI-E Bridge PCI-E Bridge Memory Controller Hub I/O Hub PCI-E Bridge 8 GB/S Eliminating Architectural Bottlenecks PCI-E Bridge I/O Hub PCI-E Bridge PCI-E Bridge I/O Hub USB PCI • AMD64 Technology with • Direct Connect Architecture • Industry-standard AMD64 technology • Direct Connect Architecture helpseliminate bottlenecks of traditional front-side bus architecture • HyperTransport™ Technology interconnect for high bandwidth and low latency • Legacy x86 Architecture • 20-year old front-side bus architecture • CPUs, Memory, I/O all share a bus • Major bottleneck to performance • Faster CPUs or more cores ≠ performance

8. Why Multi-Core Processors? AMD Opteron™ Processor Pricing

9. Multi-Core Processors Software Licensing Update “The introduction of dual and multi-core processing is triggering a long overdue debate and forcing software vendors to reassess the way they've traditionally sold enterprise software.” David Znidarsic, vice president of technology, Macrovision

10. Execution Cores Core 000 Core 001 Physical Processor Multi-Core ProcessorsSoftware Licensing Update Industry has been forced to re-evaluated the definition of a “processor” • Silicon package defines the “physical” processor • Processor has two or more execution cores • Number of cores becoming a feature that drives improved performance and efficiency

11. Multi-Core ProcessorsSoftware Licensing Update Software Licensing Trends • Trend with ISV’s surveyed is to move toward a usage or financial metric as a major licensing method Key Trends in Software Licensing – survey by Macrovision, Oct 2004

12. Multi-Core ProcessorsSoftware Licensing Update • Software most likely to license by processor: • IT Infrastructure • Database • Business Processing • Software least likely to license by processor: • Operating Systems • Application Development • Web Infrastructure • Collaboration • Decision Support • Virtual Processing/Grid/Cluster software Software Licensing in Multi-core, Multithreaded, and Virtual Environments: Executive Interviews, IDC Special Study, Sept. 2005

13. Multi-Core ProcessorsSoftware Licensing Update Since Sept. 2004, AMD has taken a leadership role in addressing the issues of multi-core processor licensing, recommending ISVs license by processor instead of by core http://www.amd.com/us-en/Corporate/VirtualPressRoom/0,,51_104_543_12605~90042,00.html

14. Multi-Core ProcessorsSoftware Licensing Update Licensing by core has the most immediate effect on 4 processor/8 core servers • You can maintain software costs by: • Negotiating alternate licensing method, such as site or user licensing • Buy smaller servers to stay within processor limits of software versions • Move to alternate software that offers a processor licensing scheme • You should closely evaluate TCO: • Smaller numbers of larger server could be more economic even with more expensive licensing if you compare hardware, infrastructure, and management costs • You need to bring licensing concerns directly to your software provider!

15. Virtualization and Grid Computing Companies are estimating that 25% to 50% of their hardware infrastructure will be dual core by 2008 • Primary workloads for multi-core systems will include • IT infrastructure • Database • Virtual processing/clustering/grid The adoption of virtualization and grid computing technologies are fueling the next round in the software licensing debate Software Licensing in Multi-core, Multithreaded, and Virtual Environments: Executive Interviews, IDC Special Study, Sept. 2005

16. Virtual Machine Virtual Machine Virtual Machine Application Application Application OS OS OS Virtualization Making Resource Consolidation a Reality! • Partitions a server into independent “virtual machines” • Enables consolidation of multiple applications onto more powerful and efficient servers • Helps to reduces costs associated with: • floor and rack space • power and cooling • software installation • administration

17. Virtual Machine Virtual Machine Virtual Machine Virtual Machine Virtualization Software App App Container Container Host OS with Hypervisor Host OS Resource Manager Solaris AMD Opteron™ Processor with Pacifica Technology Virtual Machine Virtual Machine Host OS + Virtualization Software Virtualization Approaches Hardware-Enabled Virtualization Software Virtualization

18. Grid ComputingMaking Resource Consolidation a Reality! • Cluster of industry-standard 2P and/or 4P servers • Creates as single set of shared resources that can be dynamically scaled up or down to meet demands • Reduces space, power, hardware, and administration costs while providing an efficient and secure computing infrastructure

19. Application Virtual Machine Virtual Machine Virtual Machine Virtualization and Grid ComputingSoftware Licensing Issues Per processor licensing model continues to fall apart Single application “owns” all available processors, even if it does not use them One application to one server A single application only uses some of available processors of a server or cluster One application to a subset of CPUs

20. Virtualization and Grid ComputingSoftware Licensing Issues Common Questions • If you run software on less than the full server, will you still have to pay for the full server? • If you have more virtual machines than there are processors in the server, will you have to pay for every instance of software? • How can software license models adapt to grid environments that can quickly scale up or down depending on demand?

21. Virtualization and Grid ComputingSoftware Licensing Issues • What type of licensing model could work? • Usage metric or “pay for performance” approach • Number of users • Timed use (CPU hours) • Number of transactions • Number of threads • Amount of data transferred • Software license that allows for multiple installations • One fee covers numerous installations on a server or grid • Stepped licensing plan with 100% cost for first copy and percentage discount for any additional copies

22. Virtualization and Grid ComputingSome Software Licensing Examples • Oracle and virtualization • Hardware partitioning - customers running a Solaris 10 license only the processors or cores that are running the Oracle binaries • Software partitioning - customers running virtualization software like VMware must license for all processors cores available on the server • Sun and grid computing • Sun charges $1 CPU/hour for its grid computer services

23. Virtualization and Grid ComputingSoftware Licensing Recommendations • AMD recommends that ISVs support emerging x86-based virtualization and grid computing technologies by moving to software licensing models based on: • Usage metric (pay for performance) • License that allows multiple software installations on virtualized server or computer grid

24. Pending Announcement

25. Virtualization and Grid ComputingSoftware Licensing Recommendations • Bring your licensing concerns directly to your software provider! • Move to software that offers alternate licensing scheme • ISVs taking leadership position (such as Microsoft and Sun) • Open Source Software • Negotiate alternate licensing method, such as site or user licensing

26. Solving Today’s IT Challenges • Multi-core processors • Server virtualization • Grid computing • Accelerate application performance • Improve asset utilization • Reduce computing complexity • Control infrastructure costs New Data Center Architectures

27. Closing Thoughts . . . With technologies such as multi-core, virtualization, grid and on-demand, the per CPU model is falling over William Fellows, principal analyst, The 451 Group

28. Trademark Attribution AMD, the AMD Arrow Logo, AMD Opteron, AMD Athlon, AMD PowerNow!, and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other names used in this presentation are for identification purposes only and may be trademarks of their respective owners.