This chapter of the ITAM Handbook introduces the main families of license metrics: user-based, device-based, processor-based and cloud metrics.
User Based
User-based license metrics are a common type of software licensing metric used by many vendors. This metric is based on the number of authorised users to access and use a particular software product. The definition of a user varies among different vendors but generally refers to a named user or an individual who is authorised to access the software.
Some examples of user-based license metrics used by different vendors include:
| Vendor | Metric | Description |
|---|---|---|
| Oracle | Named User Plus (NUP) | The NUP metric is based on the number of named users who are authorised to use the software product. Oracle defines a named user as an individual authorised by the customer to use the software, regardless of whether they are actively using it at any given time. |
| Microsoft | User CAL | Microsoft uses a User Client Access License (CAL) model, which allows a specific user to access and use the software product. Each user who accesses the product must have their own User CAL. |
| SAP | Named User | SAP uses a Named User metric based on the number of named users authorised to access the software. SAP defines a named user as an individual authorised by the customer to use the software and distinguishes between two types of named users: professional users and limited professional users. |
| Salesforce | Named User | Salesforce uses a Named User metric based on the number of named users authorised to access the software. Salesforce defines a named user as an individual who has been granted access to the software through a valid license agreement. |
| Autodesk | Named User Plus | Autodesk offers both single-user and multi-user options under user-based licensing. The single-user license is assigned to a specific individual and can only be used on one device at a time. The multi-user license allows for installation on multiple devices, but the number of users accessing the software simultaneously is limited by the number of licenses purchased. |
| e.g. Progress Software; Autodesk etc. | Concurrent User | Concurrent user metrics are another commonly used license metric. This model is based on the number of users accessing the software simultaneously. The license agreement typically specifies the maximum number of concurrent users allowed to access the software at any given time. This can be an attractive option for organisations where not all users can access the software simultaneously. |
Device Based
Device-based license metrics can be divided into two main categories:
Device licenses
With device licenses, the user needs to pay for every device running the software, regardless of the number of users. Examples of products that use this metric include Microsoft Office, Adobe Creative Suite, and AutoCAD.
Device client access licenses (CALs)
With device CALs, the user needs to pay for every device that connects to a certain system, such as a server running Microsoft SQL Server. This type of license is often used for enterprise-level software products and is particularly common in the Microsoft ecosystem.
Best practices
When purchasing device-based licenses, it is important to carefully consider the number of devices that will be running or connecting to the software, as this will impact the overall cost of licensing. It is also important to ensure compliance with the terms of the license agreement, particularly if there are restrictions on the number of devices or users allowed to access the software.
In addition, it is important to note that some software vendors may require the use of license management tools to track device usage and ensure compliance. Failure to comply with license agreements can result in penalties and legal action, so it is critical for organisations to have a solid understanding of their license requirements and usage.
Processor Based
Software vendors use processor-based metrics to license their products based on the number of processors or cores on a given system. This type of licensing is often used for software that runs on servers, such as database management systems, application servers, and virtualisation software.
In the past, processor-based licensing was based on the number of physical processors in a system. However, as processor technology has evolved, the number of cores per processor has increased significantly, leading software vendors to adjust their licensing models to reflect this change. Now, many software vendors license their products based on the number of cores rather than the number of physical processors.
Here are some examples of processor-based license metrics from different software vendors:
| Vendor | Metric | Description |
|---|---|---|
| IBM | Processor Value Unit (PVU) | IBM defines a processor value unit (PVU) as “a unit of measure used to differentiate licensing of software on distributed processor technologies (defined by Processor Vendor, Brand, Type, and Model Number).” IBM determines the PVU rating for a specific processor. |
| Microsoft | Core license (Core Pack) | Microsoft defines a core license as “the ability to license individual cores in a processor, with a minimum of four core licenses required for each physical processor.” This means that if a processor has fewer than four cores, the user must still purchase four-core licenses. |
| Oracle | Processor License | Oracle defines a processor as “all processors where the Oracle programs are installed and/or running.” This includes all cores on all processors, regardless of whether they are active or not. |
| SAP | Named User license with Processor Restrictions | With this license, the number of processors that can be used is limited to a specified number. For example, the SAP Business Suite is licensed based on the number of named users with a limit on the number of processors that can be used. |
These are just a few examples of processor-based license metrics used by software vendors. It’s important to note that each vendor may have their own unique definition and restrictions for processor-based licenses, so it’s important to carefully review and understand the licensing terms and conditions before purchasing any software.
Cloud Metrics
As more organisations adopt cloud computing, licensing software in the cloud has become increasingly important. Running software in the cloud requires a different licensing approach than running it on-premises due to the dynamic nature of cloud environments.
One common approach to licensing software in the cloud is to use a cloud-specific licensing model, which considers the number of virtual machines, virtual cores, or other resources used in the cloud environment. Many software vendors offer cloud-specific licensing options, which may differ from their traditional licensing models.
For example, when running Oracle Database in the cloud, customers can choose between two licensing models: Bring Your Own License (BYOL) and License Included. With BYOL, customers use their existing Oracle licenses to run the software in the cloud, while with License Included, the software license cost is bundled into the cloud service pricing.
Similarly, when running Microsoft SQL Server on Azure, customers can choose between two licensing options: Pay-As-You-Go and Bring Your Own License (BYOL). With Pay-As-You-Go, customers pay for the software license based on usage, while with BYOL, customers can use their existing SQL Server licenses to run the software in the cloud.
It is important to note that the licensing terms for cloud-based software can be complex and vary depending on the vendor and the specific product being used. It is recommended to carefully review the licensing terms and consult with the vendor to ensure compliance and avoid any unexpected costs.
Another important consideration when running software in the cloud is the need for license mobility. License mobility allows customers to move their software licenses between on-premises and cloud environments, or between cloud environments, without purchasing additional licenses. Microsoft, Oracle, and other software vendors offer license mobility options, but the specific terms and conditions vary by vendor and product.