Software prices set to soar

Security software prices could double in the next two years if traditional pricing methods continue, according to industry analysts.Gartner have warned that the increasing use of multi-chip core architectures, virtualisation of servers and increased call for on demand computing will force prices upwards.

Currently software companies such as Oracle, IBM and Sybase currently charge double for dual core chips. If they continue to do so Gartner warn that the end users will face huge increases in cost.

Gartner have slammed the practise. "If an upgrade a new dual-core design offers only a 50 percent improvement, a doubling in the license fee becomes a tax on technology innovation with little return," said Alexa Bona, research director at Gartner. "Software companies will generally charge for the total potential CPU capacity regardless of what is being used. They will have to change their policies, but that change won't come quickly," she warned.

Multi-core processors have emerged as a way to increase server performance without reliance on increased power, or the generation of more heat.

On it's own Gartner suggested multi-core processing would be a problem. With other factors pushing prices up they claimed next year could be "pricing mayhem".

Virtualised servers have shown a large market increase in the past three years, primarily because they reduce costs. But Gartner warned most software vendors will still charge on potential server capacity rather than what is actually used.

"Most users aren't aware of the combined impact of these trends," said Bona. "By the end of 2006 the manufacture of single-core chips will end. Enterprises will have no option but to pay significantly more."

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