Why do software companies love concurrent licensing?

  • Why do software companies love concurrent licensing?

    On the face of it concurrent software licensing sounds like a great deal for the customer. A set number of licenses are paid for and then any number of individual users can access the software so long as no more than the total number users never exceeds the total number of licenses. So for example, a company can have 100 licenses and 500 people can be using this software but if more than 100 want to use the software at any particular time then more licenses need to be purchased.

    Concurrent licensing is widely used for specialist and expensive applications in engineering, design and line of business applications. The individual licenses can be expensive compared to mainstream office applications. The vendors of these expensive applications know most customers will want to control their costs and do not need an enterprise license so they promote concurrent licensing as a benefit, which if managed correct this licensing model can work well for the customer. However this is not always the case.

    The major problem is the tracking of users. Most organizations simply cannot tell how many people are using an application at the same time so they rely on information from the supplier, however their information will usually be inaccurate and usually skewed in favour of the vendor. Some software asset management products claim to help with this type of licensing by offering usage tracking but this generally measures total number of users and so artificially increases the number of licenses to be purchased. Rather than helping control the costs of concurrent licensing most market leading SAM tools work in favour of the supplier.

    Another common issue is the “license hog”. These are users who come in each morning and open an application and leave it open all day “just in case they need it”. This situation often occurs where the software supplier has implemented a lock” to stop the customer from concurrently using more instances of the software than they have licensed. The license hog knows that there is a limit on the number of users and so keeps the software open and prevents other users from using the software if the limit is reached.

    Publishers of concurrently licensed software will always seek to increase the number of licenses they provide and a common model is an annual review. They will focus on the data they have available and convince the customer to buy more licenses because there is no alternative source of accurate information. However there is a solution to this problem that will put the buyer in the driving seat of the negotiations.

    The answer is concurrent usage metering. This measures how many users are using a software application at the same moment in time and creates reports of the maximum number of concurrent usage. This information is compared to the number licensed and the deltas multiplied by the cost per license shows exactly how much “wasted” cost results from the over-licensing. In many cases organizations can reduce their costs by over 50% or gain additional services and technology from their suppliers without a price increase.

    The solution to the issue of license hogs gain is quite simple. Installing a small background service will provide reports on every user who opens an application and how much time they interact with that software using either key strokes or mouse movements. When the user stops the interaction the service still records that the software is open but no longer in use. As a result the people who open software for the whole day but only use it for 10minutes can be easily identified and corrective action taken.

    As with all licensing models concurrent licensing can work very well for the buyer so long as it is control. Once again the old adage is true “What gets measured gets managed”.

    The Business Software Centre specialises in software usage metering and licensing efficiency. For more details about how to control concurrent licensing contact us here.

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    Comments (1)

    • Alan Plastow

      One of the key issues with concurrent licensing is, indeed, the egocentric metering services supplied with the product. This problem increases dramatically when the enterprise utilizes multiple concurrent licensed products from different suppliers. We strongly recommend taking the time to acquire your own metering and utilization software to monitor these products. This allows you to minimize the disruptions and admin costs of managing half a dozen or so different metering tools – most of which do NOT play well together. What’s more, concentrating your efforts with one tool will permit you to remotely log out users who consume, but do not actively use, a license – freeing that license up for another user as well as delivering a not-so-subtle message to license hogs. Negotiating this level of internal control over metering absolutely MUST become a standard when instituting any concurrently licensed agreement. The savings can be enormous.

      Reply

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