20 October 2004 Microsoft has confirmed that it will allow customers to benefit from forthcoming dual-core processors without charging additional licensing fees, putting pressure on rivals to follow suit.

Microsoft said that software currently licensed on a per-processor basis will continue to be licensed per processor, not per core, for hardware that contains dual-core and multi-core processors.

Dual-core processors, widely seen as a promising way to boost computing power, are being developed by chip makers Intel and Advanced Micro Devices (AMD). The first servers containing the new chips are set to ship in 2005. Intel estimates that 80% of servers will ship with dual-core processors by 2006.

“Our customers want to understand software costs as they evaluate the return on investment of new technologies, such as multi-core processors,” said Brent Callinicos, corporate vice president of Worldwide Licensing and Pricing at Microsoft.

Microsoft’s decision is in stark contrast to competitors IBM and Oracle, both of which intend treat dual-cores as two separate processors for licensing purposes.

“Software licensing models have lagged advances in technology,” said Alvin Park, research director at Gartner. “Software vendors throughout the industry would do well to take notice of [Microsoft’s] position,” Park added.