The Evolution of Server Pricing

Pricing models for Microsoft server products have evolved somewhat “organically” over the years, with each product group introducing its own peculiarities to meet the needs of its particular marketplace. As a result, pricing has become an exceedingly complex discussion. It is challenging for a customer to ascertain the initial set of purchases necessary for license compliance, no less keep track of compliance on an ongoing basis. Even within Microsoft there is confusion-the most common type of question posed by the field sales force to the server product groups concerns the topic of pricing.

Starting in 1994, Microsoft began charging a set fee for the right to install one of its server applications on a server machine and required the purchase of a Client Access License (CAL) for each desktop PC used to access the server. This is known as the Per-Seat pricing model. The company later offered a second pricing option-known as Concurrent-Use (also called “Per Server”)-for a subset of its server products. In the Concurrent-Use model, the CALs are applied to a particular server machine and determine the maximum number of simultaneous clients that can connect to that specific server. Concurrent-Use is more cost-effective than Per-Seat when a server application has only limited use within an organization. For example, when a large number of desktops access a single server application infrequently, the purchase of a CAL for each workstation (under the Per-Seat plan) would make the server application a prohibitively expensive solution and thus the Concurrent-Use option is preferable.