A Justification for Server CALs?

bourne.again asks: "I'm a bit confused about server client access licenses (CALs). I've looked at it from every angle I can think of, but I'm still stumped. I can't think of any justification for CALs other than greed. If you think about it, requiring CALs means that it is possible to buy a copy of a Windows server OS that can run on a server, but can't actually server anything because it has no CALs. That's a bit ridiculous. The same goes for per-cpu licenses. Shouldn't it just be per machine? An extra CPU doesn't allow you the full capabilities of a second machine. It's still just one server/workstation. Can somebody enlighten me on this, please? Why should we pay for server software, and pay per client too?"

Re:That's Capitalism

[Karma Farmer]

The submitter wants to buy a "Windows server." Exactly who besides Microsoft can sell him one of those?

He wants a Windows Server. He doesn't need a Windows Server. If he doesn't like the licensing terms, he can talk to Microsoft, or buy something else that will fulfill the actual business needs of his organization. For all I know, that might be ten thousand clerks with filing cabinets and pneumatic tubes sitting in his basement.

Or, maybe he can get by with a pony. Lord knows, I've always wanted a pony.

It's what the market will bear.

[Matt Perry]

It's what the market will bear. As long as people are willing to pay for it then someone will still be willing to sell it. At some level everything is negotiable. I know at my company we don't have to deal with CALs because we have a global contract with Microsoft for use of their software. I have no idea how much that costs us per year. I'm sure it's a lot.

One other thing that I've noticed is that the more specialized the software, the fewer copies that are sold. This software usually turns out to be more expensive and far more restrictive than more popular software. For example, at work I use a streaming video package that we spent $10k for. When you install it, you enter a license number, it contacts the company's server over the net and then activates the software. I have two problems with this.

1. If I try to reinstall, the software contacts the company servers and then tells me that the serial number is already used. It then exits. This is a risk for me if the machine with the software needs rebuilding for some reason and I can't get hold of the company to reset the activation.
2. Related to #1, our SOP is that for new software like this we have to install and test it in a test environment before it's rolled out to production machines. This is to make sure it works properly and that we document the installation and configuration process. We're required by the company to do this. Well, the second time I did the install to double check my docs I ran into the activation error. I had to call the company that we bought the software from to get them to reset the activation. They were afraid that I might be installing it on a second machine, and even said so. They did reset it. Then I had to call the third time to get it reset when we installed it on the production machine. This time they were very upset and I had to get my boss and their CTO involved.

Anyway, events like this make me really appreciate the "freedom" aspect of free software and open source software. I have little time to dick around with playing games like that with vendors. Not to mention that it leaves you completely at the mercy of the vendor.

So my point in all this is that eventually companies will learn that it's in their interest to start using software that respects flexibility rather than being node-locked, not allowing reinstalls, charging for extra CPUs & network connections, etc. But it won't make a difference until it starts affecting the bottom line of these companies.

Explaining CALs and per-CPU licenses

[metamatic]

I see people have already given you the "because people accept it" economic answer. However, there is some logic to server CALs. It goes as follows:

The value you get from software is proportional to the number of your people using it.

In the case of software that runs on the client machine, if you have N users you are generally expected to pay for N licenses, so that the amount you pay is proportional to the value you get.

If I have a server-based web content management system, and have 10 people using it, I'm getting twice as much value from it as if I only had 5 people using it--just like if it was a client-based web editing system. Basically, whether the software resides on the server or the client is a mere technical detail that doesn't really affect the value obtained, and so shouldn't affect the pricing too much.

So CALs are a way to make server software pricing more like client software pricing--i.e. proportional to value obtained.

The bit you should be asking about isn't the CAL; it's the initial server software price. The logical reason for an initial per-server fee is to cover the expected distribution and support costs when you purchase the software and try to set up the server. Unfortunately, that lump sum basically makes it disproportionately expensive to set up a server for a small number of users. That's why there has been a trend towards offering cut-down SMB versions of server software with a lower up-front cost.

Per-CPU and per-MHz licensing is an attempt to shift the expense towards those who can apparently best afford it. Or to look at it from the other side, it's another way to try and make things relatively cheaper for entry-level/low end customers. Like income tax, in other words.

One thing you didn't bring up is the difference between workstation CALs and (concurrent) user CALs. Personally, I think workstation CALs are a bit of a rip-off, and licensing should always be based on users, whether the software is server-based or client-based. If I use 5 computers in various locations, I'm not getting 5x the value of a server-based CMS--there's only one of me, and the fact that I use 5 machines instead of carrying 1 laptop everywhere should (again) be a mere detail that doesn't affect the value obtained, and so shouldn't affect the price.

Disclaimer: Opinions mine, not IBMs.

Would you rather....

[Joe5678]

If they charged a flat price, they'd need to charge a lot more to make the same amount of revenue. So somebody using it with 5 clients would pay $10,000 as would the person using it with 500 clients.

Does that seem like a better system to you? Well, probably if you're the guy using the 500 clients.

An important point to note about Microsoft Server CAL's, as long as each user (or device) has a CAL, you can add as many servers as you want (for the base cost of a server). So if you have one server and 20 CAL's, and you need to purchase a second server, you only need to pay the ~$600 for the Server software, all the clients are covered by CAL's already.