Computer Associates (CA) has introduced a usage-based pricing model for its portfolio of mainframe management software products. The overhauled pricing strategy is called Measured Workload Pricing and moves the software industry another step closer to utility computing.
“Our FlexSelect licensing program has introduced a lot of new innovation,” Mark Combs, senior vice president of corporate pricing, told TechNewsWorld. “Measured Workload Pricing seemed like a logical next step in response to customer requests.”
As its name suggests, Measured Workload Pricing bases licensing costs on how much the system is used rather than total potential hardware capability. The change is designed to enable customers to more closely align IT spending with changing business requirements.
Less Could Become More
Customers can establish license costs based on measured levels of usage, while reserving the ability to increase usage as needed to support growing demand. For example, a customer with 1,000 MIPS on its zSeries for z/OS processor might use the machine only at 65 percent capacity — with the balance of its capacity held in reserve for future business growth and/or periods of peak demand.
“By employing Measured Workload Pricing within their mainframe business model, CA is positioned to better support our mutual customers’ computing strategies,” Erich Clementi, general manager, zSeries, IBM System Group, said.
“Their usage-based pricing will be good news for the customers of the zSeries platform, as it supports variable software charging, which is aligned with the concept of an on-demand business model.”
Customers who have an existing CPU- or MIPS-based license with CA for this portfolio of products can convert those license terms to a Measured Workload Pricing model. CA is also introducing 20 aggressively priced mainframe management solution sets, available exclusively under Measured Workload Pricing, that incorporate multiple integrated products to support a focused best practice area.
While Combs sees no downside to the new model — CA still offers the traditional pricing — analysts see potential pitfalls waiting in the wings of smaller corporate IT departments.
“The downside here is that now we’ve put the capability of managing software utilization in the customer’s hands — how much he utilizes it, when he utilizes it and how he designs it — as opposed to him paying a fixed price,” Gartner research director Frank DeSalvo told TechNewsWorld.
“The efficiencies of usage-based pricing come with the technical capability to manage those efficiencies,” he added. “There’s work to be done. CA customers need to educate themselves about both models as well as how they run their business before converting to Measured Workload Pricing.”
Of course, in the distant future the software industry may see the majority of its customers opt for an on-demand model. DeSalvo said pervasive utility computing is only three to five years off.