Not only are there multiple agreement types, but there is also a myriad of license types which must be strictly followed as part of your SLM procedures. From per device licenses that are used only on one machine to per user which provides a unique login to one user and allows them access to multiple devices to the network license that cover all machines within your WAN and LAN.
Other license types include:
- Subscription-based allows both user and device licenses and is managed by a subscription with an end date specified in the subscription terms. A cloud-based credits subscription is a sub-type of subscription hosted in the cloud.
- General public license (GPL) and software come with no charge and these licenses can used, shared, copied, and modified for free.
- Client access license (CAL) allow users to connect to a specific server to access installed software.
- Capacity-based license is determined by the configuration metrics such as the CPU, hard drive, or other hardware configuration elements.
- Freeware is free to use, and the creator of the software will hold the copyrights.
If it’s not clear enough already, each vendor brings with it a different approach to licensing software, often with multiple complex agreement types. The legality must be understood in order to ensure compliance with the vendor’s restrictions. If your company is audited by the vendor, there are serious financial consequences for being out of compliance.
This brings up another reason why SLM is a minefield: it is a monumental task to be compliant, especially if you are trying to manually track software assets and license usage.
Furthermore, a vast majority of organizations believe they are currently paying for either under-used or unused software, increasing their frustration with the whole process. And they are right. Unused software costs company several million dollars yearly. It has been estimated that around 38% of software is wasted and goes unused after it is installed. There are endless licensing combinations and companies don’t know which ones best suit their business needs.