Why you should be using a Concurrent-licensing model

Blog
September 19 2016

In the process of acquiring IT Services software, one big question you must answer is this:  How do I buy software licenses? Depending on what kind of software you’re looking for, the process can go on for months, if not a year in order to finalize a purchase. You will be looking at what is advantageous and clever ways to price software licenses could make a big difference. That is why you should stop using Per-seat licensing and start using a Concurrent-licensing model.

Software Licences are often sold using a Per-seat licensing model.  Per seat licensing means that you pay for the access to the software for every person who will be using the software. You have 15 people who need a license, even though only 5 of them use the software on a daily basis? Well, you need to buy 15 licenses. It is a straightforward method of pricing, but it can be costly if you have people working only once a month in the system and still need to buy a license at full price.

Concurrent-licensing, on the other hand, charges you for the number of concurrent-users, or in other words, the number of users who will be logged into the system at the same time. Take the same 15 employees from above for example. All of them still need to use the system, but if you know that at peak capacity, you will have a maximum of 10 simultaneous users online at the same time, you will only need to buy 10 licenses and achieve the same results as you would have achieved with extra 5 licenses from the Per-seat model.

The advantages of concurrent-licenses:

The most important advantage of concurrent-licences is the flexibility it offers. They are usually more expansive than Per-seat licenses (Per-seat licences are generally easier to implement), but they offer more possibilities. Let’s say your department has had  people going into retirement recently and new employees have been hired to replace them. You would have to buy a new licence for all of them; because you cannot assign the licenses that were used by your now retired employees to you newly hired employees under a Per-seat licensing model. A Concurrent-licensing model on the other hand, would allow you to do so easily. The cheaper price of Per-seat licences may be attractive at first, but in the long run, Concurrent-licenses can save you a whole lot of money.

One less obvious advantage is the fact that your client does not need to worry about the number of accounts he has tied to the software system. In a Per-seat model, every license is tied to a user, with name and password or registered on a computer, for that computer only. This can create problems when the user is unable to come to work on a day when you NEED him or her to use the Software system to solve a problem, or if the computer with the software installed suddenly crashes during a critical moment.

Problems like these rarely occur with a Concurrent-licensing model. Licenses are not tied to a user or computer, so a client can create as many accounts as he needs, so long as the number of current user doesn’t go over the number of licenses bought.

So what’s the catch?

There’s no catch per-se, but there are areas where concurrent licensing could be improved upon and it wouldn’t be fair not to give you the whole picture. We’ve mentioned the higher price, that’s the flip side of the flexibility of Concurrent-licenses, but Peak capacity is another one of those areas. Quite often, it is hard for a business to figure out what that peak capacity is. Do you buy more than you think you need just to be sure, or do you play it safe and save money by buying a bit less, but get in trouble when demands and requests get too big to handle? Therefore, it is very important to try and figure out what that peak number is, so that you don’t get a bad surprise once the workload gets heavier.

Overall, Concurrent-licenses are the way to go   

Per-seat software licenses are still commonly used, as their cheap starting price makes them very attractive, but planning for the long-term, you may want to look at other models, as Per-seat licenses lack flexibility. Concurrent-licensing is one of those models, allowing clients to use your software, not limiting who or what machine can use it, but instead  using a more focused approach on what the client truly needs in terms of the number of software licenses allowed.

The party already started and everyone loves it. What are you waiting for to get in and join on the fun?