When it comes to computer software, most products today are sold and accessed via some form of licencing agreement. This agreement gives the business or individual the right to use the product under specific terms and conditions, without violating copyright agreements. The licence also defines the responsibilities of all parties entering into the licence agreement and may also impose restrictions on how the software can be accessed.
Usually, the software licence is issued on a per user basis and defines how the software can be used, who it can be used by, and how it will be paid for. It will also carry terms and conditions which define the relationship between all parties and legally determine how each party and the software code is protected.
There are several different types of software licencing, including:
- Public Domain | Least restrictive, anyone can access
- Lesser General Public | Can link to open source and code is shared
- Permissive | Partially distributed and requires specific distribution rights
- Copyleft | Can be distributed or modified under one licence
- Proprietary | Cannot be copied, modified, or distributed
Most business to business (b2b) and business to consumer (b2c) software uses a proprietary licencing model. This allows the software company (creator/developer) to maintain control over its code, and therefore, its features and use. This can be referred to as closed-source software, or non-free software and generally means you must pay to use it.
Very few suppliers now offer a purchase model when it comes to selling you software, no matter what your industry, but particularly in recruitment. Years ago, you could buy the recruiting software licence (the permission to use it) and then pay a small amount (usually annually) to maintain the right for support and use of the software. This was known as perpetual licencing.
Like most modern services you use, you will likely be expected to sign up to some form of subscription-based model. The cost will largely depend on the number of users you have in your business and what level of service you require. Some software or CRM suppliers, although classed as “off the shelf software”, may offer different tiers of their software package, others offer everything as standard. Either way, it’s vital you understand that the licence gives you access to everything you need as a business and/or end user.
It is equally as important to understand the costs of such subscriptions and how this is calculated. In order to do this accurately, you must find out what type of licencing model the software agreement is based off. You may have found the best recruitment software for your agency, but if the subscription model is restrictive to your growth, then this can be costly.
So, here is a break down of the two main types of licencing subscription most software agreements use.
Per-user licencing (concurrent licencing)
This type of licencing generally offers unlimited flexibility when creating users within the software, and how many of them can access the software at any given time.
In example: 100 licences would mean that you can have unlimited named users, but only 100 users would be able to access the software at any given time (i.e., concurrently).
This is generally distributed on a first come, first served basis and some suppliers will also offer you the ability to create, remove and even block user access from within the back end of the software. This allows you to control users as well as easily add and remove logins without the need for additional cost or assistance.
This type of licencing is commonly offered by hybrid cloud, PaaS, or on-premise solutions, as they tend to be far more flexible and customisable.
Per-seat or per-device licensing
This type of licensing is more limited and will generally restrict the amount of logins that can be created in the software.
For example: 100 per-seat licences would mean that the system is limited to 100 users being created, therefore restricting the access to those 100 users.
Typically, you will not have the ability to create or remove your users and will often need to contact the supplier and pay for additional user logins which can be restrictive. This type of licencing is common with web/browser-based systems that tie data to individual users and offer less in terms of configuration.
Although they both offer the same type of software access, one is far more flexible than the other and can be a lot cheaper if you have part time staff, occasional users, people on leave, or a few new starters that you are not ready to commit to.