The existing Oracle licensing model means users would have to pay up front for the maximum number of processors their Oracle-based applications could ever use.
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Speaking at the OracleWorld show in San Francisco, Oracle chief executive Larry Ellison said a flat-rate fee that allows users to use software as much as they want should replace per-processor licensing.
"It becomes very hard to count processors and to count users," said Ellison. "I think we’ll go towards enterprise licensing. You pay an annual recurring fee and use as much software as you want."
Ellison claimed some Oracle customers already paid for software in this way, but would not say when Oracle would adopt this approach more widely.
IDC analyst Carl Olofson agreed the licensing system needed to be changed for grid computing. “The technology is ahead of the licensing. Paying a licence fee based on a per-processor charge does not make sense.”
Oracle 10g allowed users to add and remove applications very easily, but a users should not be charged the full licence fee to run a 32-processor system if they only require 32 processors to run quarterly accounts four times a year, for example, he said.
But Jacqueline Woods, Oracle's vice-president of global practices, who is responsible for pricing, told Computer Weekly that pay-per-use pricing was not the way forward.
“The way licensing works today is you license to the maximum number of processors or users you use,” she said, it was irrespective of whether peak usage or peak CPU utilisation.
Volume licensing discounts make pay-per-use licensing an expensive option for users, she said.
Woods also suggested that there was little sympathy for flexible licensing at Oracle.
“There is no provision [at Oracle] where you can say 'I am using 128-processors for 20% of the year and 82 processors for 80% of the year',” Woods said. Once a user has purchased the 128 processor licence there is no way to scale back, she added.
Some hardware companies, such as Hewlett-Packard, have announced tools that can measure the amount of CPU used by a specified application uses within a given time period.
This data could provide the raw metrics for licensing software based on the amount of CPU time dedicated to the application.
However, Woods said she would only consider such tools if HP could show her how it could measure the usage of Oracle across all makes of server in the datacentre, irrespective of whether the servers are from HP, IBM, Sun or a PC manufacturer such as Dell.
Whatever changes Oracle plans for the future, for grid to take off, the whole industry will need to reach a consensus on licensing as few users run a single enterprise software supplier's products end to end.