Common Types of Software Licensing Models

Published: Applications

A license model is a combination of various parameters that define how software can be used by a customer. License models map different license attributes into logical groups, which define how a protected application is to be deployed and used. These attributes are generically defined properties (including name, data type, and possible range) making up a license.

Perpetual Licensing

Perpetual Licensing is the most traditional software licensing model. In this model, the customer purchases software once and keeps it forever. Customers typically pay upfront for the license and sometimes pay a yearly maintenance fee. One advantage of this license is that customers know the exact amount they need to pay, without being surprised by pricing changes in a subscription model. After purchasing a perpetual license, customers often host the software on their servers.

Concurrent Licensing

If you’re a business owner, you’re most likely looking for a software licensing model that will allow you to purchase multiple licenses for your employees with ease. Concurrent licensing allows businesses to purchase bulk licenses without wasting valuable cash or time. Concurrent licensing permits multiple users on one licensing code, allowing companies to manage their software licenses easily.

Subscription-Based Licensing

Subscription-based licensing has become one of the most popular software license types, specifically in today’s consumer market. Companies like Spotify, Adobe, Netflix, and others use this software licensing model with great success. Customer satisfaction is particularly high with this model due to customers having previous familiarity and comfort with such a system. The subscription-based type of licensing agreement allows for self-service features which boost customer trust and satisfaction. Additionally, customers enjoy knowing exactly when they will be charged for use (monthly, yearly, etc.).

Proprietary Licensing

Most types of software licensing models today are proprietary licenses. Proprietary licenses allow customers to purchase the rights to use software through a license (no matter which type), while the software publisher maintains full ownership of the software. When a customer purchases software with a proprietary licensing model, the company or individual will have to agree to the Terms and Conditions, namely that the software remains the property of the provider. This is the case with Microsoft Windows, for example. This software license type can be used in conjunction with any of the software licensing models that Thales Sentinel offers.

Floating Feature Licensing

Floating feature licensing allows a customer to purchase multiple licenses while limiting the use of particular features among users at the same time. This software licensing model allows companies to be flexible in the use and choice of features, and therefore undoubtedly save money.

Feature-Based Licensing

If you’re looking to provide customers with a highly flexible type of licensing agreement, feature-based licensing is the way to go. This model allows ultimate control over which features can be used on each license code, allowing for personalization depending on the needs of each employer or user.

Network Licensing

A unique situation arises when customers want to use software and don’t have consistent internet access. This can cause problems in controlling which features users have access to as well as monitoring license use and more. In these situations, the best type of software licensing model is network licensing. Sentinel provides licensing solutions that continue to allow you to monitor use, even when internet access isn’t available.

Cloud-Based Licensing

Cloud-based licensing allows a user-centric option, offering access anywhere, anytime. While various types of software license models can be cloud-based, subscription licenses are the most common. One successful example of cloud licensing is Cloud-based licenses work best when built from an existing on-site licensing platform or when building a new system. Moving a non-cloud license to cloud-based is less recommended.

Understanding the different types of software licensing models available today, will allow your company to grow and offer your customers flexibility, according to their needs. Integrating cloud-based licensing will increase customer satisfaction and revenue generation while keeping your company efficient. At Thales Sentinel, our goal is to provide our customers with the software licensing model that fits their exact needs. Our different types of licenses allow all companies, large or small, to create the perfect system to fit both their company and their customers.