Software prices set to soar

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."

www.gartner.com