Software contracts; define the usage rights

Last week a new client of ours was asking about software license usage rights. Specifically they wanted to know what was the difference between a concurrent user and a named user. The simple answer is that there’s a lot of difference, including the price per user. The definitions of usage terms vary between suppliers and failing to get usage terms clarified can cost you money when the supplier finds you are ’under licensed’ after only a year or two. If you’re buying software then clarifying and agreeing usage rights should be a part of your negotiation strategy.

Confirm the numbers and types of users you have. Then discuss different licensing options with your software supplier. Find out which license type best suits your business. It’s not just your employees that might need licensing; do you plan to use external consultants or your outsourcing supplier to help implement the solution, will you be allowing your agents or customers web access to do self-service activities, etc etc. And note; you can mix and match usage types which will bring your sofware costs (and pro-rate annual support) down. 

And some licensing is based on servers/CPU’s; so make sure you clarify what happens if you decided to upgrade or change server type during the life of the software.

And find out where you can use the software; UK may be fine for most of your business, but what about that subsidiary abroad?

Software suppliers have developed an array of ways to catch you out. So as the saying goes: caveat emptor -  buyer beware.

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