The world of software is replete with a multitude of applications serving myriad purposes, from operating systems that power our computers, business tools that drive organizations and multimedia suites that aid in content creation, to antivirus software that protects our digital environments. With such a diverse array of software applications comes a matching diversity in how these digital resources are licensed. Software licenses grant users the right to use a piece of software under certain conditions.
Understanding these software license models is fundamental, not just from a legal perspective, but also from strategic and financial viewpoints. Different license models can have a significant impact on how businesses deploy and use software, affecting both cost and functionality.
Dating back to the early days of software development in the late 1950s, licensing has played a pivotal role in software distribution. The core purpose of software licensing has remained largely unchanged over the decades: it is an agreement that allows end-users to utilize a piece of software without infringing on the rights of the software’s creators.
IBM’s introduction of the perpetual license with its mainframe computers in the 1960s serves as a hallmark moment in the history of software licensing. This model allowed users to pay a single upfront cost for indefinite usage of the software. As the digital landscape evolved, so did the licensing models, paving the way for new paradigms such as subscription licensing, concurrent user licensing, CPU licensing, and many more, each addressing different usage patterns and business needs.
As seen with Office 365 introduced in 2011, the shift towards subscription-based licensing models has allowed businesses to move from substantial upfront investments to more manageable operational expenditures. Similarly, Adobe’s shift from a perpetual licensing model to a subscription-based model for its Creative Suite in 2013 marked a notable example of how licensing models have evolved in response to changing industry trends and consumer preferences.
Understanding the various software license models is not only necessary for legal compliance but also allows businesses to make strategic decisions regarding software procurement and deployment. This chapter will delve into these diverse software license models, providing a comprehensive view of their unique characteristics, benefits, challenges, and their influence on the software industry over the years.
Perpetual licenses
The perpetual license model has long been the industry standard. As the name suggests, a perpetual license grants the licensee the right to use the software indefinitely. Once the software is purchased, the user owns a license to the software, and no additional fees need to be paid to continue using it. Perpetual licenses originated in the era of boxed software, where users would buy a physical copy of the software, install it on their machines, and use it as long as they wished. This model gained prominence in the 1960s with companies like IBM distributing their mainframe computers under a perpetual license model.
Perpetual licensing has its advantages. The most obvious one is that the user has the right to use the software for as long as desired without further payments. This model can be cost-effective over the long term, especially if the software doesn’t require frequent updates or if the user doesn’t require the latest features that come with updates. However, perpetual licenses also have their disadvantages. The initial upfront cost can be significant, which may pose challenges for smaller businesses or startups. Also, while the user may have the right to use the software indefinitely, the vendor is not obligated to provide updates or support indefinitely. This means users may eventually find themselves with outdated software or additional support cost.
In addition, perpetual licenses are usually machine-specific, making them less flexible for businesses with dynamic needs or a mobile workforce. In the era of digital transformation, where work is becoming increasingly remote and cloud-based, this lack of flexibility can be a notable downside.
Examples
One classic example of a software distributed under a perpetual license is Microsoft’s older versions of Office Suite, such as Microsoft Office 2010. Users could buy the software once and use it indefinitely without additional payments.
Similarly, Adobe once sold its Creative Suite, which included popular applications like Photoshop and Illustrator, under a perpetual license model. However, in 2013, Adobe shifted to a subscription-based model with the launch of Adobe Creative Cloud, illustrating the software industry’s gradual shift away from the perpetual licensing model.
Overall, while the perpetual license model has its merits, it has been gradually overtaken by other models that better fit the needs of the modern, digital world. The following sections will delve into these alternatives, exploring their unique characteristics and their place in the landscape of software licensing.
Open source licenses
Open source licensing represents one of the most influential philosophies in the software industry. The term “open source” was coined in 1998, a pivotal moment marking the formal recognition of a movement that had been brewing for decades.
Open source licensing fundamentally refers to a type of software license that allows the source code to be freely available. This means that the software can be inspected, modified, and distributed by anyone. However, it’s crucial to note that “free” in this context refers to freedom and not necessarily to price. In the words of Richard Stallman, a key figure in the open source movement, it is “free as in freedom, not as in free beer.” What he means is that the software doesn’t necessarily come without any monetary cost, similar to receiving a free beer at a bar. In the context of open source, “free” is not primarily about price but about the user’s freedom to utilize the software.
The “freedom” in “free as in freedom” refers to the liberties granted to users under open source licenses. These liberties often include the freedom to use the software for any purpose, the freedom to access and modify the source code (i.e., freedom to understand how the software works and make changes to it), and the freedom to distribute the software or any modifications made to it.
The philosophy underpinning open source licensing harks back to the principles of the free software movement that began in the 1980s. This movement was driven by a belief in the freedom to run, study, share, and modify software. While there are nuanced differences between the free software movement and the open source movement, they both advocate for the availability of the source code.
Open source licensing is built on principles of transparency, collaboration, and community. It is about removing barriers to innovation and enabling collective problem-solving. This can lead to faster bug detection, more robust solutions, and a greater sense of ownership and engagement from the software’s user community.
A quintessential example of open source software is the Linux operating system. Launched in 1991, it was licensed under the General Public License (GPL), which allows users to freely run, study, share, and modify the software. Today, Linux powers servers, supercomputers, and Android smartphones worldwide, demonstrating the vast reach and influence of open source licensing.
Subscription licenses
Subscription-based licenses, as the name implies, involve users paying a recurring fee to use the software for a specified period. The fee is typically charged monthly or annually. This licensing model has gained popularity in the software industry in recent years, as it aligns well with the Software as a Service (SaaS) delivery model. This is a significant shift from the traditional perpetual licenses, as it emphasizes services and updates over simple access to a software product. The adoption of subscription licenses accelerated in the 2000s with the rise of cloud computing. The delivery of software as a service via the Internet facilitated the growth of this model, as it removed the need for physical distribution and installation of software.
The subscription model offers several benefits to both the vendors and users. For vendors, it ensures a steady stream of income and enables them to improve and update their products based on user feedback and needs. For users, it often means access to the most recent version of the software, regular updates, and sometimes even additional services like cloud storage or customer support. In addition, the subscription model provides flexibility. Users can scale their subscription plans up or down based on their needs, and the lower initial cost compared to perpetual licenses makes premium software more accessible to a wider range of users.
However, subscription licenses are not without their downsides. Over time, the recurring payments might end up being more expensive than a one-time perpetual license fee. Moreover, once the subscription ends, access to the software is usually cut off, which can be problematic if a user forgets to renew or chooses to end the subscription. There’s also a risk of “vendor lock-in”, where users become heavily reliant on a specific software and might find it difficult to migrate to a different platform.
Examples
One of the leading pioneers of subscription licensing is Salesforce, a renowned provider of cloud-based CRM (Customer Relationship Management) solutions. The company has revolutionized the software industry since its establishment in 1999 by providing its services on a subscription basis. Salesforce has been instrumental in popularizing the SaaS (Software as a Service) model and demonstrated its viability on a large scale.
In the world of team collaboration tools, Slack utilizes a subscription licensing model. Founded in 2013, Slack provides different subscription plans that offer more features and capabilities than its free version, such as larger storage for messages and files and more app integrations.
The subscription model, with its focus on continuous service and updates, reflects the dynamic nature of today’s software market. While it may not be ideal for every user or every application, its prominence indicates that it’s here to stay.
Concurrent user licenses
Concurrent licensing, also known as network licensing or floating licensing, is a model where the total number of simultaneous users for a program is limited to a specific number. This licensing model allows for software to be installed on multiple machines, but limits the number of users accessing the software at any one time to the number of licenses purchased. For example, if a business has 10 concurrent licenses for a software, it could have the software installed on 50 machines, but only 10 users could use the software simultaneously.
The key advantage of concurrent licensing is flexibility. It is particularly suited to applications that are used infrequently or by a large number of people, but only a few at a time. This model allows organisations to maximise their software utilisation while keeping costs under control, since they don’t have to purchase a license for every potential user.
However, the drawback is that users may be denied access when all licenses are in use, disrupting workflows and productivity. Managing and tracking concurrent licenses can also be complex, requiring sophisticated license management tools.
Examples
AutoCAD, the popular design and drafting software by Autodesk, offers network licenses that serve multiple users across a network. They allow a number of users to share access to the application, making it a cost-effective solution for teams who don’t need to use the software continuously.
MathWorks, the producer of MATLAB (a high-level technical computing language and interactive environment for algorithm development), offers concurrent licenses. This licensing model is perfect for universities and large corporations where users may need access to MATLAB sporadically.
Adobe Creative Cloud for enterprise: Adobe provides concurrent licensing for its Creative Cloud applications intended for use in computer labs, classrooms, and shared device setups, such as in universities or design firms.
Named user licenses
The Named User Licenses page of this chapter is kept separately as the archived page Named User Licenses. For the cited reference on the model, see Named user licensing.
CPU licenses
CPU or processor-based licensing is a model where the cost of software licenses is tied to the number or power of CPUs or processors in a machine or server where the software is installed. This model emerged in response to the increased computing capabilities of hardware and was used extensively in server-based environments where high levels of processing power were commonplace.
A key advantage of CPU or processor-based licenses is that they can potentially maximize the use of software in high-performance environments. Since the licensing cost is tied to the processing power, it allows for a high number of users or operations without requiring additional licenses. This can be advantageous in environments where heavy computing is necessary, such as in data processing or complex modeling tasks.
However, the challenges posed by this model are notable. Understanding and tracking the processing power across different servers or machines can be complex, particularly in virtualized or cloud-based environments. In addition, this model could potentially lead to higher costs if the processing power of the server exceeds the actual software usage. It’s important to manage these licenses effectively to avoid unnecessary expenditure.
Examples
Oracle, a giant in the world of database software, is one company known for its use of CPU or processor-based licensing. For Oracle’s Database software, the company charges based on the number of processors, which is determined using a specific formula that takes into account the type and number of cores in the processor. This licensing model has allowed Oracle to align its pricing with the potential value that high-performance servers bring to businesses.
IBM’s WebSphere MQ, a messaging middleware, is another example where CPU or processor-based licensing is applied. However, IBM has incorporated a unique spin on this model by introducing sub-capacity licensing. In contrast to full capacity licensing where the total capacity of a server is considered, sub-capacity licensing allows businesses to pay only for the processing power actually used by the software, offering a greater degree of flexibility and potentially reducing licensing costs.
These examples demonstrate how CPU or processor-based licensing can be implemented in practice. While this model can be beneficial in certain contexts, it underscores the need for effective software asset management to ensure that costs are kept in check. Understanding the intricacies of these licenses is essential in navigating the complex landscape of software licensing.
Core licenses
Core-based licensing is a model where the licensing cost is directly linked to the number of CPU cores in a machine or server. This licensing model has evolved with the advent of multi-core processors, which significantly increase a machine’s computing power.
The benefit of core-based licensing lies in its correlation with performance. Since multi-core processors can execute multiple tasks simultaneously, a core-based license can allow businesses to maximise the software’s utility and efficiency on powerful hardware. This model can provide a more granular and potentially fairer pricing approach compared to per-processor or per-machine licensing models.
However, there are drawbacks. Like CPU/processor-based licenses, core-based licenses can be challenging to manage, particularly in dynamic environments where hardware changes frequently or in virtual environments where cores can be allocated dynamically. Furthermore, they can potentially lead to higher costs in environments with high core-density servers, even if the software isn’t fully utilising all cores.
Examples
Microsoft SQL Server is a prominent example of software that uses a core-based licensing model. Microsoft requires a core license for every physical core in the server, ensuring that businesses scale their licenses with their hardware capabilities. However, to offset potentially high costs, Microsoft has imposed a minimum core license requirement per physical processor to ensure a baseline level of licensing revenue.
Oracle, too, employs a sort of hybrid processor-core model for its database products. In their case, a “Processor” is counted based on cores but also considers the type of the processor, assigning a core factor to different types of CPUs. This approach attempts to provide a fair reflection of the actual computing power that Oracle’s software can utilise.
By scrutinising these examples, we can understand how core-based licensing offers a more precise measurement of a server’s processing power. It allows for more granular control over software costs, but also highlights the necessity for accurate inventory and efficient management of hardware resources. This licensing model serves again as a reminder of the ongoing evolution in software licensing, shaped by advances in hardware technology.
Site licenses
Site licenses are a specific licensing model that allows an organization to use a piece of software throughout an entire physical location or “site.” A site can range from a specific building to an entire campus or corporate facility. Site licenses are typically all-encompassing, covering all machines or users within the defined physical location.
The primary advantage of a site license is simplicity. It eliminates the need to count users or machines, reducing administrative overhead and making compliance straightforward. Furthermore, a site license can provide cost advantages for organisations with many users or machines in a particular location.
However, there are potential drawbacks to site licenses as well. They may not be cost-effective for organisations with a smaller number of users or machines in a location. Also, the definition of a “site” can sometimes be a subject of contention, particularly for organisations with remote or distributed workforces. Finally, site licenses typically do not cover usage outside of the designated site, which can be a limitation for businesses with mobile or remote workers.
Examples
An example of software often licensed this way is Adobe Creative Cloud for enterprise. Adobe offers site licensing under their “Enterprise Term License Agreement” (ETLA), allowing all employees in a specific location access to their software suite. This type of licensing is common in educational institutions and large businesses, where numerous users need to access the software simultaneously.
Microsoft has also offered site licenses, known as “Campus Agreements” for educational institutions. Under this agreement, institutions can provide access to certain Microsoft software for all students, faculty, and staff on a specific campus.
Through these examples, we can see that site licenses provide an efficient, though sometimes cost-intensive, approach to large-scale software deployment. While they are less common in an era of cloud computing and remote work, they still hold relevance for certain types of organisations, particularly large institutions with a concentrated user base.
Role licenses
Role-based licenses, as the name suggests, are a type of software licensing model where the usage rights and restrictions are defined based on the role of the user within an organization. This licensing model aligns software access and functionalities with the specific responsibilities and tasks of different user groups.
One of the significant benefits of role-based licensing is its ability to manage software costs efficiently. Since licenses are allocated based on roles, organizations can avoid purchasing unnecessary features or services for users who do not need them. It also allows for a more secure software environment as users only get access to the software or features that are necessary for their job function, reducing the risk of data breaches or misuse.
However, role-based licensing can be complex to manage. Determining what software or features are needed for each role within an organization can be a daunting task. The licenses also need to be adjusted as roles change or as the organization evolves, which can increase administrative overhead.
Examples
Salesforce, a leading provider of cloud-based customer relationship management (CRM) software, utilizes role-based licensing in its pricing structure. Different user licenses are available based on the user’s role, such as “Salesforce” licenses for standard CRM functionality and “Salesforce Platform” licenses for users who need to access custom apps but not standard CRM functionality.
Similarly, Microsoft Dynamics 365, another major CRM and ERP platform, also implements role-based licensing. Licenses are classified under various apps and plans, each designed for users in different roles, for example “Sales Professional” for salespeople, “Customer Service Professional” for service reps, or “Finance” for finance personnel.
By examining these examples, we can see how role-based licenses can provide efficiency and security benefits but also require a well-defined understanding of user roles within an organization. This makes role-based licensing especially suitable for larger organizations with clearly defined roles and responsibilities.
Custom licenses
Custom licenses, also known as bespoke licenses, are unique and tailor-made agreements designed to meet the specific needs of a particular organization or situation. Unlike the standard license types, custom licenses offer the flexibility to determine the rights, restrictions, and terms based on the organization’s specific requirements.
One of the primary advantages of custom licenses is this high degree of flexibility. Businesses can negotiate the terms to align the licenses with their operations and strategic goals, addressing their unique needs that are not catered to by standard licensing models. Custom licenses can also provide cost-efficiency by eliminating unnecessary features and focusing on the exact requirements.
However, custom licenses come with their own challenges. They require significant time and resources to negotiate and manage due to their complexity. Moreover, auditing and ensuring compliance can be more challenging with custom licenses due to their unique nature.
Examples
Several large organisations and government bodies often resort to custom licenses due to their complex and specific needs. For instance, the United States Department of Defense (DoD) has had a series of bespoke licensing agreements with Microsoft, known as the “Enterprise Software Initiative.” This custom license, renewed periodically, covers desktop software and services for millions of DoD personnel.
Similarly, large enterprises with substantial and unique software needs often negotiate custom licenses with software providers. An example can be seen in the case of Walmart and Microsoft, where the retail giant entered into a five-year agreement in 2018 for a wide range of Microsoft’s cloud services. This tailor-made agreement provides Walmart with flexibility and strategic value beyond what standard licensing models might offer.
While custom licenses can offer a high degree of flexibility and potential cost-efficiency, they also come with their own complexities and management challenges. However, for large organisations with specific needs, they can provide a valuable tool to align software licensing with business strategy.
Device licenses
Device licenses are a type of software licensing model that permits the use of software on a specific device, irrespective of the number of users accessing the software on that device. This means a single license covers the software’s usage on one device, whether it’s used by one person or multiple individuals.
The primary advantage of device licenses lies in their simplicity and cost-effectiveness when multiple users are accessing the software on a single device, such as in shared workstation scenarios. This makes it particularly useful in environments like computer labs, libraries, or retail point-of-sale systems.
However, the device licensing model has its limitations. It lacks the flexibility of user-centric licenses when individuals need to access the software from multiple devices. It also becomes more costly in situations where each individual has a dedicated workstation or device.
Examples
Microsoft’s Windows operating system is a prime example of a software product traditionally licensed per device. Each installation of Windows on a device requires a separate license. However, it’s crucial to note that in a server environment, accessing certain features like Remote Desktop Services or connecting to an Active Directory domain would require additional licenses known as Client Access Licenses (CALs).
Adobe’s Creative Suite, prior to its shift to the Creative Cloud subscription model, also used a device-based licensing model. Each installation of the software, such as Photoshop or Illustrator, required a separate license per device.
Device licenses can be advantageous in shared-device environments, but their lack of flexibility can pose challenges in today’s increasingly mobile and decentralised work environments. Understanding these pros and cons is key to choosing the most appropriate licensing model for a particular situation.
Network licenses
Network licenses, also known as floating licenses, allow a specified number of users to access software concurrently over a network. The software is usually installed on a server and can be accessed by any user on the network until the limit of simultaneous users is reached.
One of the primary advantages of network licenses is their flexibility. This model allows businesses to purchase fewer licenses than total users, as long as the number of concurrent users does not exceed the license limit. This can lead to cost savings, particularly for software that is not in constant use or is used by shift workers.
However, managing network licenses can pose challenges. Monitoring usage to ensure compliance can be complex. Network outages or server issues can also impede access to the software. Additionally, it may be difficult to predict the maximum number of concurrent users accurately, which can either lead to overuse (and potential legal issues) or underuse (and thus wasted resources).
Examples
Autodesk’s suite of products is a prime example of software often licensed on a network basis. Prior to its shift to named user licenses in 2020, Autodesk allowed businesses to use a network license which enables a pool of users to share access to the Autodesk products, with limits on the number of simultaneous users.
Similarly, IBM’s SPSS Statistics, a popular software for statistical analysis, also offers network licenses. This allows institutions such as universities to provide access to a large number of students and faculty members, with a limit on the number of concurrent users.
Network licenses provide a degree of flexibility that can be cost-effective for certain organisations. However, they require careful management to ensure that the maximum number of concurrent users aligns with the needs of the business and compliance requirements.
Educational and government licenses
Educational and government licenses are special categories of software licenses offered at discounted rates to qualifying institutions. These licenses are part of a broader effort by software publishers to support public sectors, foster learning, and contribute to societal development.
The most evident advantage of these licenses is their cost-effectiveness. Schools, universities, and government organisations can access software at significantly reduced prices, often with additional perks like bundled software packages or extended support. This is particularly beneficial for educational institutions, where budget constraints can limit access to crucial digital tools.
For software companies, offering educational and government licenses can enhance their public image and cultivate future users. Students familiarised with a software product during their studies are likely to continue using it in their professional lives, hence contributing to the product’s long-term market viability.
On the downside, these licenses usually come with strict eligibility requirements and usage restrictions. For example, software accessed under an educational license may be limited to non-commercial, educational purposes only. Also, the verification process for qualifying for these licenses can be rigorous, requiring proof of status as an educational or governmental institution.
Examples
Microsoft offers Office 365 Education for free to students and teachers in eligible institutions. This package includes familiar productivity tools such as Word, Excel, and PowerPoint. Government agencies also benefit from specially tailored licenses. Microsoft provides Office 365 Government plans designed to meet the unique needs of government organisations, ensuring compliance with stringent regulatory requirements.
Cisco offers numerous solutions for government use, including secure networking, collaboration, and data center solutions, all designed to be compliant with the unique regulations that government entities face.
IBM has a program called “IBM Academic Initiative” that gives faculty members, students, and researchers free access to a lot of their software. This includes access to IBM Watson, IBM Blockchain, and other services for teaching, learning, and non-commercial research.
Adobe Creative Cloud also has a discounted offer for students and teachers, providing access to their suite of creative software including Photoshop, Illustrator, and Premiere Pro.
Autodesk provides students, educators, and educational institutions free access to their software, including AutoCAD, Revit, and 3ds Max, for learning and teaching. For government institutions, they offer federal, state, and local government-specific solutions for architecture, engineering, and construction; product design and manufacturing; and media and entertainment.
Educational and government licenses provide cost-effective access to essential software for qualifying institutions. These licenses play a critical role in supporting public sectors, but they come with specific usage restrictions and require rigorous eligibility verification.
Volume or enterprise licenses
Volume or enterprise licenses are typically arranged between software vendors and larger organisations, allowing the latter to deploy the software across a vast user base. It often includes a per-unit discount compared to standard pricing, and usually comes with an added layer of support and maintenance for the duration of the contract.
These licenses have become the cornerstone of software deployment in mid-to-large scale businesses, educational institutions, and government agencies. The primary attraction of this licensing type lies in its cost-effectiveness, especially when software needs to be rolled out across a large number of users. Additionally, the simplicity of having a single license that covers all necessary usage, instead of tracking individual licenses for each user or device, is another key factor driving its popularity.
That said, volume or enterprise licenses are not without their challenges. The substantial upfront costs can be a deterrent for organisations operating on tight budgets. Further, there’s a risk of inefficiency; if the actual number of users falls short of the purchased licenses, it could lead to wasteful spending. Another challenge lies in license management; ensuring compliance across a broad user base can be complex and resource-intensive.
Examples
Practically every major software vendor offers some variant of volume or enterprise licensing due to the scalability and convenience it offers to large organisations.
IBM provides Passport Advantage, a comprehensive program that simplifies the purchase, distribution, and management of large-scale IBM deployments. Another example is the enterprise solutions offered by SAP, which allows businesses to benefit from volume discounts when licensing their vast array of enterprise software solutions.
Other notable examples of software using volume or enterprise licenses include Microsoft’s Volume Licensing program, Adobe’s Creative Cloud for enterprise, and Oracle’s Unlimited License Agreement (ULA).
Volume or enterprise licenses have become a universally recognised and widely utilised model across various software types and industry domains, echoing their significance in today’s software licensing landscape.
Personal and home use licenses
Personal or home use licenses signify an important category within software licensing, explicitly designed for non-commercial or individual household usage. Often scaled-down or less feature-heavy versions of their commercial counterparts, these licenses cater to the needs of individual users who do not require advanced capabilities that are pertinent to business environments.
The primary advantage of personal or home use licenses is their affordability. They provide access to robust software solutions, though with a limited feature set, at a fraction of the cost of commercial licenses. This makes high-quality software accessible to individuals for personal or home use. On the downside, personal licenses typically restrict the user to fewer features, lesser scalability, limited or no access to professional customer support, and more importantly prohibit the user from using the software for commercial purposes.
Examples
Many software vendors understand the value of catering to this user segment and offer personal or home use licenses as part of their licensing models. A classic example is Microsoft’s Office Home & Student edition, which provides access to key Office applications like Word, Excel, and PowerPoint at a one-time purchase price. As of 2022, the Home & Student edition could be installed on one PC or Mac, reflecting Microsoft’s effort to offer affordable options to individual users.
Similarly, Adobe offers a Photography Plan as part of their Creative Cloud subscriptions that allows personal users access to Photoshop and Lightroom at a significantly lower price than its full suite of creative applications. Launched in 2013, the Photography Plan catered to a growing base of photography enthusiasts looking for affordable access to Adobe’s professional editing tools.
Another example can be found in the realm of antivirus software. Companies like Norton and McAfee offer home use licenses for their security software to ensure individuals can protect their personal computers from cyber threats. With cyber threats on the rise, the value of these accessible security solutions cannot be understated.
Through these examples, we can see that personal or home use licenses serve as an essential bridge between professional-grade software solutions and individual users, balancing affordability with functionality.
Evaluation and trial licenses
Evaluation and trial licenses form an integral part of software licensing, offering potential users an opportunity to try out a product before making a purchase decision. This type of licensing model typically provides full or limited access to the software’s features for a predetermined period, such as 14 or 30 days, giving users the chance to assess the software’s capabilities and its fit for their specific needs.
The main advantage of evaluation and trial licenses is that they allow users to “test drive” the software without any financial commitment, thus reducing the risks associated with purchasing a new product. On the other hand, there are a few potential downsides. First, the time limit may be insufficient for users to fully evaluate the software, and second, the trial version may not include all features, which can lead to an incomplete assessment of the software’s capabilities.
Examples
A plethora of software vendors, spanning from niche startups to industry stalwarts, have adopted evaluation and trial licenses as part of their marketing strategy. Take, for instance, the project management software Atlassian’s Jira. As of the latest figures in 2023, Atlassian offers a 7-day trial of Jira Software, providing users with an opportunity to explore its comprehensive project tracking features.
A very common example, Microsoft offers a one-month trial of its Office 365 suite, as of the latest figures in 2023. This gives users access to the full suite of applications, including Word, Excel, and PowerPoint, enabling them to evaluate the functionality and decide if it fits their needs.
Autodesk, a 3D design, engineering, and entertainment software company, also offers a 30-day trial for its AutoCAD software. This allows potential users to evaluate the software’s design and drafting tools, which have become a staple in industries such as architecture, engineering, and construction.
Software in the realm of business intelligence also commonly offers evaluation licenses. Tableau, a data visualisation and business intelligence software, offers a 14-day trial. During this period, potential customers can assess Tableau’s data visualisation capabilities, which play a critical role in data-driven decision making in various industries.
Evaluation and trial licenses play a fundamental role in the software market, serving as an effective tool for software companies to attract new customers and for users to make informed decisions. And more often than not we also see these products causing potential risk issues for enterprises, if not managed properly.
Free licenses
Free licenses, also known as freeware, refer to software that users can download, install, and operate without incurring any financial costs. Unlike trial or evaluation licenses, freeware typically does not come with a time limitation. However, they may come with limitations in terms of features or capabilities compared to their paid counterparts.
The primary advantage of free licenses is, unsurprisingly, the absence of cost. This can be particularly appealing to individual users or small businesses with tight budgets. Additionally, freeware often attracts a large user community that can provide support and create resources such as tutorials or forums. On the downside, free licenses may lack the full functionalities or have less frequent updates and professional support compared to paid software. Additionally, free software sometimes comes with advertisements, or in worst case scenarios, bundled unwanted software (also known as “bloatware”).
Examples
Several widely used free software solutions demonstrate the wide-ranging nature of free licenses. One classic example is 7-Zip, a free and open source file archiver known for its high compression ratio. Its popularity stems not only from its cost (or lack thereof) but also its capabilities and wide-ranging format support compared to other commercial file compression tools.
Another instance is Notepad++, a free source code editor and Notepad replacement that supports several languages. Launched in 2003, Notepad++ has been a staple tool for developers and analysts due to its user-friendly interface, rich features, and its zero-cost license.
Visual Studio Code (VS Code), developed by Microsoft, is another example of a software with a free license for personal and commercial use. This lightweight, open source code editor, released in 2015, has quickly gained popularity among developers for its speed, extensibility, and the rich set of built-in features like debugging, syntax highlighting, intelligent code completion, snippets, and code refactoring.
RVTools, another freeware, has become widely used in the virtualization field. It allows administrators to retrieve and display critical information about VMware environments, providing insights that help in management and troubleshooting.
The VLC Media Player by the VideoLAN project is another well-known example of a free license. VLC’s ability to play nearly any video format without the need for additional codecs has made it a popular choice among users worldwide. It also includes advanced features like media conversion and streaming capabilities.
Similarly, popular Google offerings such as Google Docs, Google Sheets, and Google Slides are free to use. These applications offer a suite of essential tools for document creation, spreadsheets, and presentations. They showcase the expanding scope of free licenses into the realm of cloud computing.
LibreOffice, a free and open source office suite, serves as an alternative to proprietary suites like Microsoft Office. Developed by The Document Foundation, LibreOffice provides a wide range of features sufficient for most casual users and small businesses.
An example relevant to the SAM and ITAM field is Spiceworks, a freeware license model that caters to IT professionals. The Texas-based company offers a suite of free IT management tools, including network monitoring, help desk ticketing, IT asset inventory, and more, alongside an online community for IT professionals. The company generates revenue through the ads displayed within the software and on its community platform rather than through user fees.
Like other free licenses, this ad-supported model has its pros and cons. On the one hand, it lowers the barrier to entry, making it accessible for businesses of all sizes, particularly small and medium-sized enterprises (SMEs) with limited budgets. On the other hand, some users might find the ad-supported model disruptive or prefer premium features and support typically associated with paid software. The example illustrates both the viability of the freeware license model for a specific audience and the importance of monetization alternatives to user fees.
It’s clear that free licenses cover a broad spectrum of software, offering functionalities ranging from essential to advanced without any monetary investment. Nevertheless, users should carefully consider whether free software meets their specific needs before adopting these tools.