Software licensing management is defined as the tracking and documentation of the software used in an organization. It is part of Software Asset Management (SAM). The process allows the users to carry out the operations of tracking, evaluating, and guaranteeing how software is being handled and ultimately increases the revenue by assuring that the users are appropriately licensed and are on the correct terms.
It is a license that comes with software that states what can and cannot be done and under what circumstances it is to be used, who can use it, for how much time, and the like. The users either get one in-house system or get purpose-built software solutions.
What is a software license?
A software license stipulates the rules to use and helps in defining any restrictions that may apply. It provides permission to use a specific product or service just like a driver’s license provides legal recognition to someone to operate a vehicle.
The terms and conditions of a license determine how can one use it. Such as specifying that a certain number of users can use it and the ability to install it on multiple devices.
How does software licensing work?
The software license is just like renting a car. For renting a car, one must have the owner’s permission and the car keys. Similarly, for software to run, one requires correct permission. The permission is granted by paying the fee. There are n number of software models avail which have their terms and conditions. But, paying a fee to access the software is the common attribute of all the types.
Types of Software licensing
- Perpetual licensing
It is when the user has to pay just once for the software and he gets to use it for as long as he likes. It is more convenient as it is hosted entirely on a user’s device and by not relying on internet access. It is the most hassle-free kind of license as it provides clarity on a single fee and few terms.
- Subscription licensing
As the name suggests, the subscription licensing is for a limited use against which a fee is charged, usually, monthly or annually. Failing to make the payment after the specified period, the user loses access to the license. It provides less commitment to flexibility than a perpetual license.
- SaaS licensing
It is the license where the users pay to get access to specific amounts of time in the cloud instead of owning or downloading it. It is based on a subscription basis. It allows the users to dodge the costs of purchasing and maintaining the software. Instead, they pay for it regularly. It is known to handle the updates, maintenance, and installation costs.
- User-based licensing
It is the type of license that is designed to attach to a specific user. No matter what device they use, their information remains intact, and no matter where they are accessing the software application. It is usually used when it is required to retain sensitive customer information.
- Concurrent licensing
It comes in bulk. The users get a certain amount of licenses ha are supposed to be used once on any device. It s cost-effective for organizations that have staff working multiple shifts across multiple time zones. even the employees who don’t work the same shifts can share the license.
- Floating licensing
It is almost similar to concurrent licensing. It is licensed to several users who use it simultaneously regardless of the location of the device. It can be exchanged between different users in an organization to reduce software costs.
- Feature licensing
It is when a license provides the same application under different pricing options where they get different software features to different users. It also enables customization to some extent. It is combined with software licensing terms often.
- Metered licensing
It is when access to software is limited. Limited as in the number of times a user signs in, the number of times a certain feature is used, or the number of times the software has been used. It is the kind of license that can be combined with other licensing models.
Process of software licensing management
- Organize your licenses
The first step is to organize the license and the info on the software programs that one is using. It is important to do so as it helps to ascertain what one owns and what is to be assigned to the employees.
- in-house creation
One of the two ways to license the software product as a software business is by developing an in-house licensing engine. But, at first, the system is manageable but as the business would grow, a lot of time and money would be employed to maintain it.
- Employ a Specialist
The other option involves outsourcing the software licensing specialist. It is most suited for businesses that are well-established and are looking to expand their market.
- Set up a renewals system
The situation of forgetting to renew the license is something that you would want to avoid. So, for that, the best way out is o schedule renewals and approvals and any other license needs.