Sunday, July 12, 2009

Licensing terms: poison or fertilizer?

There are as many different licensing schemes as there are products, but they mainly come down to seat-based or concurrent licensing models. This may be an oversimplification, but please bear with me on this as it makes it easier to explain my point.

Seat-based licensing means that each person who uses a software product or service must have their own individual account for that product. Concurrent licensing means that multiple individuals can share access to a product or service. Site licensing is a common variation of concurrent licensing.

The applications that I deliver to my internal customers are not broadly used. The usage rates usually show a small percentage of core, heavy users of a product (e.g. near daily use), a larger percentage being moderate users (e.g. 1-10 times per month), and the majority of the users being very light users (e.g. 1-4 times per year). This is entirely natural and appropriate given the types of products we deliver, and I have no interest in trying to convert casual users to heavy users where it doesn't make business sense.

A seat-based license generally makes it difficult to support more than the small percentage of core users. It is difficult to justify the expense of a product for casual users. Also, seat-based licenses generally require more administration by my staff who generally have much more valuable things to than shift seats around and reset passwords.

A concurrent license makes it easier to advertise a product or service to a larger potential user base where we might be reluctant to do so for a seat-based licensed product. A larger user base, even a casual user base, makes it easier to defend a product or service during budget discussions. Often, concurrent licenses encourage the vendor to do a better job with usability (due to the expectation of larger numbers of casual users who will not benefit from extensive training), self-service administration and usage logging. The first two items mean my staff spends less time on administration and more on product evangelism. The last item is invaluable for resource management.

Now if you have a product that is truly so complex and onerous to use that you are only going to have a handful of experts using it, then by all means, use a seat-based license. Otherwise, think about whether you want your product or service to die on the vine or flourish.