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The world of software licensing has undergone a remarkable transformation in recent years. It’s a journey that has transitioned from the traditional model of outright software purchases to dynamic Software as a Service (SaaS) platforms. Today, most enterprise software solutions offer two main licensing types.
This comprehensive guide delves into these software licensing options and explores the importance of selecting the correct option for your business based on cost management, scalability, and seamless user access.
Two Fundamental License Types
When it comes to licensing options, there are two main license types: Concurrent User Licenses (CULs) and Named User Licenses. While both may be options that could work for your organization, there are benefits and drawbacks to each. Read on to learn what these licensing options are and the differences between them.
- Named User Licensing
Named User licensing is a licensing model where each individual user or “seat” requires a separate license for access to the software. In this model, the number of licenses corresponds directly to the number of users authorized to use the software. Each user is assigned a dedicated license, regardless of whether or not they use the software simultaneously with other users.
Here are some reasons why organizations may choose this licensing option:
- Simplicity: The concept is straightforward – one user, one license. This model simplifies license management, ensuring each user has a dedicated license.
- Predictability: With named user licensing, costs are predictable based on the number of users rather than their usage patterns.
- Guaranteed Access: Users with named user licenses enjoy guaranteed access to the software, eradicating concerns about wait times or access issues.
Here are some potential drawbacks to this licensing option:
- Not Ideal for Larger Businesses: In larger organizations, there can be a significant number of employees who may need access to the software, but their individual use may be infrequent. Providing a named seat for each of these users would likely be less cost-effective due to the underutilization of the licenses.
- More Restrictive: Large businesses are dynamic and may experience changes in user numbers over time. With named user licensing, adding new users means purchasing additional licenses or having to reassign purchased licenses, which can be time-consuming and potentially inefficient if the number of users fluctuates frequently. This lack of scalability can hinder the organization’s flexibility.
- Budget Predictability: Large organizations often have strict budget requirements. Named user licensing can make it challenging to predict software costs accurately since they are directly tied to the number of users rather than actual usage patterns, leading to unpredictable costs.
2. Concurrent User License (CUL)
Concurrent user licensing (CUL), sometimes referred to as a floating license, is a software licensing model where the software can be accessed by a fixed number of users simultaneously. In this model, the number of licenses is determined by the maximum number of users who can use the software at the same time rather than the total number of individual users. This licensing model is the ideal option for organizations that have 15—20+ users that need to access the software and may have different usage needs and frequency of use.
Pros:
- Cost-Effective for Variable Usage: This license is a cost-effective choice for organizations with many users who don’t typically need to access the organization’s document management software simultaneously.
- Automatic Flexibility: CULs are particularly beneficial for organizations with users in different shifts or across various time zones since they allow for a rotation of access.
- Scalability: It’s easier to scale up or down based on actual usage patterns without accounting for individual user licenses.
Cons:
- Access Limitations: During peak usage times, users might need to wait for a license to become available if the maximum number of concurrent software users is reached.
- Complex Usage Patterns: In organizations with highly variable or unpredictable usage patterns, managing concurrent user licenses can be challenging. Understanding and predicting when peak usage occurs and how many licenses are needed can be a complex task.
License Future Adaptability
Today’s business requirements might differ from those anticipated for the future, so you’ll want to ensure that the licensing model you select can evolve alongside your organization’s growth. Consider the following questions when making your choice.
- Does this licensing model efficiently adjust to changes in user numbers, ensuring scalability as my organization grows or downsizes?
- Can this licensing model be tailored based on how often users engage with the system, optimizing resource usage?
- Can this licensing model cater to the access needs of my users?
Ensuring the Best Licensing Option for Your Organization
At Mindwrap, we understand the diverse needs of businesses and the critical role that flexible licensing options play in ensuring the success of document management solutions. Our commitment to offering tailor-made licenses is rooted in our desire to meet the varied needs of our clients.
We encourage you to reach out to the Mindwrap team for a discovery call to discuss your unique requirements. With Mindwrap, you’re not just selecting an enterprise document management system and licensing model; you’re choosing a strategic partner. We’re here to support your growth and efficiency every step of the way.
