Licensing is not complicated - do not be deceived by appearances....

The problem is the sheer volume and apparent variety of information.  With the big software publishers, the task can look daunting in terms of:
  • The number of products.
  • The many different ways that licences can be purchased.
  • Complex technical structures that determine a specific type of licence.
As an example, it is said that Microsoft have over 500 different types of licence.  But whilst this might be true in a completely literal sense, the principles upon which every one of those licences is based tend to be universal.

That means that all you have to do is understand a few basic principles and then apply that knowledge to each situation.

For once reality is straightforward
In fact there are very few licensing concepts to decipher.

It is vital, however, that you understand these basic concepts otherwise the consequences can be dramatic.

Every day we speak to people who are responsible for licensing budgets - sometimes running into millions of pounds - who do not seem to have a full grasp of the basics.

The result is huge financial risk to their organisation.

The purpose of this section is to explain the basic concepts of licensing.  The next few pages cover off the high level concepts of licensing.

For specific detail regarding publishers and their products see our Reconciliation section.

What do you need to know?
At the highest level there are two types of licence contract that are fundamentally different, and they differ in two ways.

Proprietary (or closed source) software requires licences to be purchased and you do not have the right to alter or modify the software in any way.

Open source software is still supplied under a licence, but you are almost always NOT required to purchase the licence.  The licence also defines the way in which you can alter, modify or develop the software.
    SAMsource focusses on how to deal with commercial software licensing as that is where all the work is involved and so this section is all about making sense of the proprietary world.  Having said that we do give an overview of Open Source software for your information.

    1) Proprietary software product groups
    The first point to make is that proprietary licensing concepts and rules follow patterns within product groups depending on the type of machine and software in question.

    We have broken these product groups down into the types of machine that you deal with most often:
    1. Client machines
    2. Servers
    3. Connections to servers
    4. Virtual machines

    Once you know which group the software you wish to license belongs to, you then have a very good idea of what you need to purchase in terms of a licence (licence model) and how to purchase it (licence type).

    2) Licence models

    The next step is to understand the licence models that are available to you.

    Product groups tend to define which licence model to use, or at least the small number of choices that you have available.

    A licence model is simply whether the licence is install based, or user based or processor based etc (for more detail see licence models).

    So for Microsoft Office or Adobe Photoshop, the licence model is always install based (unless such applications are deployed over Terminal Services or Citrix).

    Server applications are usually install based as well.

    Connections to server are usually user based, but can be device or install based as well.

    and so on....

    3) Licence types

    You then need to work out the best way to purchase the licence.

    Generally, you have a choice between the anonymous single purchase (boxed product) made at a shop, or if your organisation is going to license multiple copies of the software it is wise to set up a contract (volume agreements) with the software publisher.

    We suggest setting up contracts wherever possible, as they are a much cheaper way to purchase software and you are far less likely to be provided with counterfeit product.

    In principle these contracts are simple in concept, but there is often such a range of contracts to choose from that life can get complicated.

    In Reconciliation, within each publisher's section we have detailed the main contract types available, for example - Microsoft licence agreements

    Licence transfers
    In this section we also look at Licence transfers and what you should look out for.  It is vital to follow the process as specified by the relevant publisher, otherwise you could lose all rights to the licences in question.

    Make sure you understand
    If you are in any doubt before a purchase is made as to the validity of the licence with regards to the software in question, then speak to your reseller for advice and ultimately to the publisher.

    Top Tip
    - Always record any correspondence with the publisher in writing.  If ever there should be a dispute in the future, then a publisher will take into consideration anything you have kept as evidence, whereas reports of phone conversations will not be.

    It is vital before we go any further to ensure that you understand the difference between software and a software licence.

    Software is what is loaded on the machine.

    A software licence is a contract that grants rights around the installation, use or connection to the software - think of it as a piece of paper.

    Apologies if this is stating the bleedin obvious, but we often work with customers who confuse the two, which leads to all sorts of misunderstanding.

    For more detail see:

    More confusion is often caused by the use of terms such as licence key, when actually it has nothing to do with a licence and everything to do with activation of the product which are very different - Licence/Activation keys

    Let's begin with a more detailed look at our main product groups; first up are Client machines...