Types of Software License

There are several types of software license, in general they can be grouped into individual licenses, special channel licenses, multi-user licenses and network licenses.

individual licenses

This type of license allows the program to be installed and used on a CPU that is not accessible by other users over a network. The Software will only be used on a single computer, and other users will not be able to access or run the Software while connected to your computer. Types of individual licenses are:

  1. Perpetual license: allows the customer to install and use the software indefinitely. Technical support is included for a limited period, usually 90 days.
  2. Subscription License – Allows the user to use the software for a specified period of time. This license generally includes technical support and access to updates and patches released during the subscription period. At the end of the term, the user has several options: (1) renew the subscription; or (2) purchase a perpetual license at a discounted cost; or (3) remove the software from the computer.
  3. Freeware license: This type of license is offered as freeware by the author and does not require the payment of any fees for its use.
  4. Shareware License: This is a license to use the software for a trial period and then if you continue to use the software, you must pay a shareware fee or stop using the software.

Special channel licenses

  1. OEM (Original Equipment Manufacturer): These licenses cover software for stand-alone PCs and laptops and must remain bundled on the computer system and NOT be distributed as a separate (or stand-alone) product. This software will be identified or labeled “For distribution with new computer hardware only.”
  2. Educational or academic software: Software marked for distribution to educational institutions and students at reduced prices. This software is generally labeled as an academic product and for the exclusive use of academic or educational institutions.
  3. Software License Not for Resale (NFR): Specific, restricted licenses made available directly by software vendors in the distribution channel and are typically marked NFR with explicit conditions that it is NOT FOR RESALE (Nor for Resale ). out = NFR). This type of software is not licensed for normal commercial distribution.
  4. Concurrent Use – This type of license requires you to purchase licenses for the maximum number of people who will be running the software simultaneously. However, you can usually install the software on more computers than that.

Multi-user licenses

  1. Volume Licensing –  Allows the licensee to install the software on a certain number of computers. The licensee generally has to satisfy a minimum purchase requirement and gets discounted prices in return. When purchasing licenses, the licensee typically receives a copy of the media and documentation with the option to purchase more.
  2. Site/Enterprise: This license provides access to the software in a single location. These licenses are typically negotiated individually with the publisher and vary widely in their provisions.
  3. Limited: See site/company license above.

network licenses

  1. Server (Network): Licensed Per Server: This type of license requires that you have a single copy of the software that resides on the file server. With the Per Server license, a specific number of users is associated with a particular server. The number of devices that can legally access that server simultaneously is limited in the licenses per server.
  2. Per seat (machine):  Also known as a per machine/seat license, this license requires you to purchase a license for each client computer and/or device where access to the services is needed. This license is normally used in conjunction with a network license.
  3. Per Processor: In the Per Processor model, you purchase a processor license for each processor on the server on which the software is running. A processor license generally includes access for an unlimited number of users to connect.
  4. Per Mailbox (Education customers only): If you are an education customer using Exchange Server, you have the additional option of deploying licenses in Per Mailbox mode. With this model, you purchase a license for each unique mailbox that accesses Exchange Server.

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