The growth of grid computing is being stymied by the traditional per-processor licensing models that software vendors continue to push, according to a new research study from The 451 Group.

What"s needed, according to the New York-based analyst firm, is a re-evaluation of software licensing strategies that won"t penalize grid users by charging them for each processor they use in their work.

"I think the industry is going to need to come to an accommodation," said William Fellows, lead author of the new study, called "Grid Computing -- The Impact of Software Licensing." The study was released last week.

According to Fellows, existing licensing models often don"t account for the large number of CPUs available in grid systems, making them extremely expensive to use for many applications. One possibility: Instead of basing licensing costs on the number of CPUs in a grid, companies could charge a flat-rate licensing premium for grid use, he said.

One market ripe for such a change is in engineering electronic design automation (EDA) software, where electronic component makers such as Intel Corp., Advanced Micro Devices Inc. and Micron Technology Inc. use EDA applications for research on processors and memory chips. So far, EDA software makers such as Synopsis Inc. and Cadence Design Systems haven"t changed their licensing models to make grid use more affordable, Fellows said.

"They [EDA software users] are basically all feeling pain because they"re all using grids" for research, he said. But because of the high per-CPU costs, they can"t run EDA applications on the grids and get the inherent performance benefits, Fellows said.

While some industries, including financial services, can afford grid projects despite the high licensing costs, that luxury isn"t available to every industry. "Grid has an opportunity to be a major player in [IT] to the extent that it can get its arms around some of these problems," Fellows said.

The 77-page study concludes that user pressures will likely force companies to change software licensing models to make them more affordable for grid users.

"What"s clear is that as grid activity increases, so too will demands for enhanced license models -- plus the instrumentation and management to support them," the study states. "Users also require more flexibility in the way software is bought and used, since the grid resource pool is shared and constantly shifting."

The number of CPUs isn"t the only licensing issue affecting grid users, according to the study. The physical location of the processors, often a factor in license pricing, must also be addressed. For software vendors, the need to devise more flexible licensing approaches -- and the effect on the companies" bottom lines -- "will be huge," the study said.

"There"s resistance to change among customers, where one-time license charges plus an annual fee remain the preferred contract models," the study said. "Organizations need to retain the predictability of expenditure versus pay-per-use; and there"s a lack of instrumentation to track usage for more flexible models. Most vendors suggest that early adopters will pay a premium for deploying software across a grid. There is one thing that all vendors appear to agree on, however: that customer demand is what will ultimately drive any changes to their license models."

What"s likely to emerge is a range of licensing models, including some with measured usage -- by transaction volume, time used or even how WAN-enabled an application is, according to the study. How quickly that happens will depend, at least in part, on how quickly any of the largest software vendors cut grid licensing prices.

Grid computing spokesmen from IBM and Oracle Corp. weren"t available for comment on the report.

Steve Crumb, executive director of the Global Grid Forum, said he hasn"t read the complete study, but he noted that members of his organization are very interested in licensing costs. The forum includes grid users who are working toward global standardization for grid computing.

"The Global Grid Forum wants to provide a forum where those sorts of issues can be discussed and resolved," Crumb said. "At least at this point, the software licensing practices that are out there today could be one of the hindrances to the pervasive adoption of grid computing. It is something we have definitely considered and would like to tackle as we move forward."