Pages
Events
Whitepapers
Software licence models: What should companies look out for when choosing?
Software fulfils a wide variety of tasks in companies: It forms the technological foundation for various business models, helps to manage business processes, communicate with employees, customers and suppliers and much more. Many people only realise this in passing: When private users or companies use software, this always takes place within the framework of a licence agreement between the developer of the software and the end user. There are many different software licence models, which are characterised by different terms of use, support agreements, restrictions and costs, among other things. Commercial users in particular should have a comprehensive knowledge of software licences, as they play an important role in adhering to legal regulations and compliance requirements within the company.
Definition: What is a software licence?
The licence agreement is a text document that serves the purpose of protecting the intellectual property of the software developer and limiting claims against him that could arise from the use of the software. Among other things, it contains legally binding guidelines for the use and distribution of the software. The contents of a licence agreement include, among other things
- Authorisation to use the software
- Rights of use
- Number of users authorised to use the software
- Services included in the scope of delivery of the software (e.g. support, maintenance, software upgrades)
- Warranty conditions
- Authorisations and restrictions for the distribution of the software
- Definition of copyright
- Conditions for terminating the licence
- Performance guarantees for the software
- Contractual penalties and fees for non-compliance
Why is correct licensing important?
Software licensing is important in that it ensures that software is used legally. It also plays an important role in preventing IT security risks. Unlicensed software makes companies vulnerable and exposes them to potential threats and risks.
The use of unlicensed software is an offence of software piracy. The owner or copyright holder of the software can take legal action and assert high claims if a software audit reveals that the software used is not adequately licensed or is being used in a way other than agreed in the licence agreement. Such audits are not only carried out at large corporations, but recently also increasingly at smaller companies.
Unlicensed software also represents a potential security risk. Devices that use such software are more often the target of cyberattacks than devices with properly licensed software.
A usage agreement or EULA (End User Licence Agreement) guarantees the legal use of software for end users. They also benefit from manufacturer support and regular security updates and do not run any risks in the event of a software audit.
What software licence models are there?
The various software licence models differ primarily in terms of the conditions for using, copying, modifying and passing on software. Most applications are either proprietary or open source software, with specific software licence models being used in each case. The two categories differ both in terms of their legal framework and the fact that proprietary licences, unlike most open source licences, are subject to a fee.
Software licence models essentially relate to either
- Proprietary software - also known as "closed source"
or to
- Free and open source software (FOSS = Free and Open Source Software) - also referred to as "open source"
Open source software licences
Open source software licence models grant the user the right to make changes to the source code of the software, which is provided together with the software product.
In both cases, the software licence usually specifies limitations of liability for the use of the software product, mutual obligations such as support, as well as guarantees or warranty exclusions.
Another software category, which plays a rather minor role, is public domain software, which can be used without a licence and legal framework.
Perpetual licence
A perpetual licence gives the user the unlimited right to use a software application after a one-off purchase. The licence normally relates to a specific version of the software product.
In the past, the perpetual licence model was very common, but this is increasingly changing. There are now other licensing models that enable software manufacturers to market their products more effectively.
Floating licence
A floating licence comprises a fixed number of licences, which in turn entitles a corresponding number of users to use the software at the same time. The special thing about this is that a floating licence can be transferred from one user to another as long as the number of available licences is not exceeded - it therefore "flows" between different users.
For example, if a company with 30 employees has ten floating licences, ten of these 30 employees can use the software at the same time. However, it does not always have to be the same ten. The advantage of floating licences is that with a relatively small number of licences, a theoretically unlimited number of users can use the software.
Copyleft licence
Copyleft licences are licences for open source software that ensure that modified versions of the software continue to be available to users free of charge and open source. Anyone who modifies the code must publish their version accordingly with a copyleft licence.
One of the best known and most widespread copyleft licences is the GNU General Public License (GPL), which in various versions essentially ensures that end users can run software, view the source code, pass it on and modify it - and that the resulting new software must be distributed under the same licence conditions.
Subscription-based licence
A subscription-based licence is a licence that allows the end user to use software for a limited period of time on a recurring basis. Typical periods are 30 (monthly subscription) or 365 days (annual subscription) before the licence must be renewed. As a rule, subscriptions are automatically renewed after the first term.
The subscription-based licence is one of the most common types of licence. Most people are familiar with the basic principle from services such as Netflix or Spotify. It offers developers the advantage of generating ongoing income with their software, while users benefit from regular updates and good support.
Windows CAL
The Windows Server Client Access Licence (CAL) is a licence that gives a user (User CAL) or device (Device CAL) the right to access services from a server running the Windows Server operating system. A user CAL must be purchased for each user who accesses the server in order to use services. Licensing software via CALs can be complicated due to the technical characteristics of servers and networks. A solution such as ACMP Licence Management helps to record access for both user and device CALs and thus provides the necessary transparency.
What is a licence fee?
Licence fees or licence costs are the costs for acquiring a licence and therefore the right to use software. The amount of these fees is part of the licence agreement and usually relates to the costs for a single user or a certain number of users. Depending on the licence model, the licence costs are to be paid once or at certain intervals (monthly, annually). In particular, mixed forms of the above-mentioned licence models entail different licence fees. For example, a node-locked licence in the form of a perpetual licence incurs different costs than the same node-locked licence in the form of a subscription. Furthermore, some perpetual licences incur regular update fees for newer versions or security updates in addition to one-off acquisition costs, which in turn is similar to a subscription model.
As software licence fees are associated with very high costs for companies, it is worth paying particular attention to this topic, as there is often massive savings potential here.
Why do you need licence management?
Software licences are one of the biggest cost factors for companies when it comes to IT. What's more, once a company reaches a certain size, it's easy to lose track of things when using numerous software solutions. Questions quickly arise such as: Does the number of licences available match the number of licences used? Are we prepared for compliance checks and audits?
With the increasing complexity of IT ecosystems, software licence management is becoming ever more important and reporting is becoming an essential component of software asset management. It is therefore important for companies not to take the issue of licence management lightly and to look for appropriate strategies.
Solutions such as ACMP licence management ensure that unlicensed software is detected in the company network before it becomes a problem. Insufficiently licensed applications can come to light during a software audit and result in high fines.
ACMP licence management ensures transparent mapping of software in use and identifies unused or unlicensed software, which can then be placed in a retirement or standby status. Efficient licence management saves companies high long-term costs associated with unused licences, compliance violations and cyberattacks.
Conclusion: clever management of software licence models
Companies should be aware of what software licence models are, which licence models exist and what needs to be considered when using software in this context. With the help of a powerful licence management solution, companies never lose track of their licences. This minimises the risk of legal problems and cyberattacks that can result from the use of unlicensed software.
Are you thinking about introducing a licence management solution to save costs in the long term and be legally protected? Then let's talk - we will be happy to answer any questions you may have! Contact us here to get in touch with us.
Es scheint, als wären Sie auf nicht auf der gewünschten Sprachversion dieser Website gelandet. Möchten Sie wechseln?