Software is increasingly important in the times we live in, as it allows a company to not only function properly, but also become more efficient and productive. That's why we decided to talk about Software licensing.
This is the case of Microsoft Windows and Office. Have you ever thought how inefficient and unproductive it would be if we didn’t have this solution that has profoundly changed the way organizations operate?
But it is not just owning the “software”, it is essential that it is licensed because it cannot become a problem for the company. Better understand the importance of relying on software licensing by following the reading!
This guide explains how software licensing works, its main types, benefits, and risks of unauthorized use. You will understand why investing in legitimate licenses is a strategic decision to protect data and optimize costs.
What is software licensing?
Software licensing can be understood as the process by which the developer company allows or authorizes another organization or individual to use its technology. For this, it provides a code that must be inserted in the indicated place when the professional is installing the technology in the device, which can be a computer or cell phone, for example.
Software licenses are usually limited to a single usage right. For example, if your company purchased Windows 10, it can only use it on a single device and not concurrently.
Why software licensing is essential for businesses
Software is the backbone of modern operations. It drives productivity, efficiency, and competitiveness. However, Having the right software is not enough. It is essential that it is properly licensed. After all, unauthorized use can lead to legal problems, security breaches, and high unforeseen costs.
Furthermore, with the increase in digitalization, licensing has become a strategic part of IT Governance. Companies that maintain control over their licenses gain transparency regarding costs, compliance, and actual usage of the tools.
How does software licensing work?
When purchasing software, the user accepts an End User License Agreement (EULA), a document that defines the rights, restrictions, and responsibilities of use.
This contract determines when the license takes effect, how the product can be installed, and what the user is permitted to do.
Cloud and SaaS Licensing
In Software as a Service models (SaaSIn Brazil, licensing is even more dynamic. It usually includes:
- Monthly or annual billing per user;
- Contract duration and renewal conditions;
- Cancellation and refund policies;
- Usage rights and limitations as per the plan chosen.
This information ensures financial predictability and operational flexibility, essential factors for companies seeking scalability.
Learn about the main types of software licensing models.
1. Traditional and Perpetual Use Licenses
- Perpetual License: One-time, lifetime purchase of the software, with a possible annual maintenance fee. Today, this is being replaced by more flexible models.
- Support and maintenance license: It complements the perpetual license by offering updates and fixes.
2. Time-based or subscription-based licenses
- Subscription license: Recurring payment (monthly, yearly). Automatic and predictable renewal.
- Fixed-duration license (FDL): Use limited to a specific period.
- Fixed-term corporate license: Similar to the FDL, but shared among employees — only one can use it at a time.
- On-demand corporate licensing (ODC): Allows for shared and limited use by total time (e.g., 365 days combined among employees).
- Trial license: Free temporary access to evaluate the software.
3. Usage-based and consumption-based licenses
- License measured: Billing is based on actual resource usage (time, CPU, data, access). Flexible, but can generate variable costs.
- License based on usage time: It limits the time during which the user can access the application.
- Aggregate usage time license: It sums up the total usage time of a group, useful for cost control in projects.
4. Shared and collaborative licenses
- Floating license: Licenses are shared among users — whoever accesses it first gets to use it, up to the defined limit.
- Project-based license: It allows multiple people (even from different companies) to use the software under a single master license.
5. Licenses with specific restrictions
- Resource license: Detailed control over which functions the customer can use.
- Anchored license: Linked to a single, specific device.
- Device license: Assigned to a set of devices, without involving human users.
- Offline usage license: Allows you to use the software without an internet connection for a specified period.
- Whitelist license: Restricts access to previously authorized users.
6. Licenses by target audience
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Academic license: Designed for educational institutions, with reduced or free costs. It aims to familiarize students and researchers with the software.
Benefits of software asset management
Software Asset Management (SAM) is a system for maintaining oversight and centralizing control of software licenses in your organization. There are three main benefits associated with software asset management.
Improve oversight and minimize waste
A software asset management program empowers the IT organization with complete oversight of the IT assets within an organization. IT and purchasing managers can identify where licenses are not being used and reduce waste by opting out of renewing excess licenses.
Optimize IT spend and find savings
IT organizations can optimize their software spend and find opportunities to save money by managing software licenses.
Improved license oversight means IT managers can purchase the right types of software license types in the appropriate quantities to meet business needs. They can also identify opportunities to secure volume discounts by renewing licenses in bulk.
Reduce financial and litigation risk with license compliance
Compliance with software licenses is the driving force behind the adoption of software tools from IT asset management. Organizations that violate their license agreements with software vendors can face lengthy audits, costly patch payments, financial penalties, and even litigation.
Read also:
Software license: understand how it works
Software License: How to manage your expenses
Risks of using unlicensed software
Using pirated software may seem like an immediate saving, but in practice, It causes serious harm., such as:
- Exposure to viruses and malware that compromise sensitive data.
- – Risk of phishing and theft of corporate information.
- – Lack of technical support and updates.
- Loss of credibility and legal vulnerability.
Furthermore, unlicensed software violates intellectual property laws and can result in hefty fines and lawsuits.
How to Ensure Licensing Compliance
- – Keep an up-to-date inventory of all software.
- – Use SAM tools to track and audit licenses.
- Review contracts periodically.
- – Adopt internal policies for usage and installation.
- Choose reliable providers and secure cloud solutions.
FAQ
1. What happens if I use unlicensed software?
Your company could be fined, lose data, and face legal penalties. Furthermore, pirated software compromises digital security.
2. What is the difference between a perpetual license and a subscription license?
A perpetual license is purchased only once. A subscription license, on the other hand, requires recurring payments, usually with continuous updates.
3. How do I know if my software is properly licensed?
Verify digital certificates, invoices, and license agreements. SAM tools help monitor this compliance.
4. Is it worth investing in license management?
Yes! It reduces costs, prevents risks, and ensures legal compliance.
5. Is it possible to migrate from a traditional license to SaaS?
Yes. Many companies are migrating to SaaS because of its flexibility and ease of upgrades.
Software licensing is a smart strategy for managing and protecting digital assets. Ensuring your tools are properly licensed increases the efficiency, security, and reliability of your operations. Want to optimize your company's licensing strategy? Contact us and discover how we can help your organization reduce risks, save money, and operate in full compliance.