Software Licensing Part 2: License Models

In the last post I gave a general overview of the history/state of software licensing and what you do and don’t own.  In this post I give a run down of popular license models.  While there are some other ways licensing is done, the types listed below (or combos) tend to be the most popular in the Line Of Business applications (LOB) such as CRM, Project Management and Accounting.  There are some other models you may see in the Infrsastructure side, but my focus as usual is business people, and their software, not IT/Infrastructure people.

Note: This list is the software license model name and how the model works.  It does not cover; pros/cons or; deployment models such as public, private, hybrid or; service delivery methods like SaaS, PaaS, IaaS where may be combined with hosting services.  This post is intended to address the Software License and the intellectual property you are licensing aside from other any other component you may be paying for.  This aferall is what a License is for.  I will cover these other concepts in future posts.

Named License: With a Named License you pay a fee per named user that has accesses the software application. For example, jdoe1 and jdoe2 would each have their own login, with unique username and password. When jdoe1 logs in a single named license is already associated to jdoe1 and no other user can access the software using that license.  When jdoe1 logs out that license is still associated with jdoe1 and can not be used by another user regardless of whether jdoe1 is using it or not.  Some application like Sharepoint may also deliniate between company users, owner users, and subcontractor/vendor users for purposes of license costs.

Concurrent License:  With a Concurrent License you pay a fee per concurrent license.  It is sometimes referred to as an enterprise license, but concurrent is how it technically functions.  For example, jdoe1 and jdoe2 would each have their own login with a unique username and password.  When jdoe1 logs in, a license is acquired for their use.  When jdoe1 logs out the license is released for use by other users.

Site License:  With a site license you pay a fee per installation instance.  If you have a single instance site license then you can install it on one production system.  It does not matter how many named or concurrent users access the software application.  Often times you will also be granted a failover site license or test license at no added charge.  This means you can install the software on another site, but not for production use.

Processor License:  With a processor license you pay a fee per processor that is used on the servers that run the software application.  If a server running your software has 2 processors, you would pay $N x 2.

Project License:  With a Project license you pay a fee per Construction Project.  This is more common in the AEC Industry (the focus of this blog) than other indsutries where the concept of Projects is often smaller.  It does not matter how many users access the software application as long as they are associated to that particular project.

Revenue Based License:  With a Revenue based license you pay a license fee based on the amount of revenue that you earn as an entity.  This could be based on your company revenue if the entire comapny is using the software or based on project revenue if the software is limited to a single project use.

In forthcoming posts I’ll get into some Pros/Cons of the models from the Vendor and Customer perspectives regarding management, costs/monetization, cloud standards, and where we are or might be headed.