When you buy software, you’re buying rights to use that software; otherwise called licensing. Software licensing can be purchased on a one-time basis (a perpetual license)Â or as a subscription.
Both types of licences give you the right to use the software, but there are some important differences between the two.
What Is Software Licensing?
Software licensing is an agreement between the buyer and seller. The terms of your licence will be written into this agreement in order to protect both parties.
For example, if payments aren’t received, your software provider may be liable to terminate your access to their services without notice.
What Is One-Time Purchase Software Licensing?
A single payment to use the software indefinitely is known as a perpetual software license. This is a great option if you’re certain you’ll use the software for an extended period of time as it will ultimately be a cost-effective purchase if the software serves you for long enough.
However, if your needs change and the software is no longer of use, your commitment to the software may have been an over-priced purchase.
What Is Subscription Model Software Licensing?
A monthly or annual payment to access new versions of the software as they become available, instead of having to buy them again.
This is a more flexible option and is viable if you’re unsure how much time will go into using the piece of software, or if you’re aware that the software has an end-of-life date set.
When purchasing software for multiple users such as a staff base, the majority of buyers choose a subscription plan since each user’s lifespan working with the software is uncertain.
Conclusion
What is software licensing? Software licensing is designed to protect the intellectual property rights of the software developer. Licenses grant users the right to work with that software and set limitations to how it can be used, such as how many people can use it or for how long.
Perpetual software licenses can be cost-effective, however, will eventually be left behind when new versions are produced and the previous software goes end-of-life.
A subscription model for software licensing is often more appropriate as it means the software can constantly be updated with new versions, and payments can be terminated at any point if the software license is no longer needed.
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