How to Choose the Right Software Licence Based on Your Needs

Gaurav Rathore
Gaurav Rathore

Tech Writer

His write-ups blend creativity, personal experience, and tailored technical advice, meeting reader needs effectively.

7 min read

Key Takeaways 

  • The first thing people need to understand is the type of license suitable for them.
  • See how and where the software will be used.
  • If your team frequently upgrades devices or uses virtual environments, choose a license that allows for hardware upgrades and cross-platform flexibility.
  • There’s no universal license. So, always read the terms carefully and choose what best fits your technical and business needs.
  • See if your license includes the necessary support, updates, and complies with industry regulations.
choose the right software

Have you ever bought software only to realize that you couldn’t use it the way you wanted to? Well, if the answer is yes, then you are not alone. According to a survey, 43% of software installed on computers worldwide is not licensed properly. Which often leads to a waste of money and even legal issues. (Source: BSA Global Software)

This is understandable also; with multiple options available out there, it’s normal to feel confused. But you know what? Choosing the right software license doesn’t have to be this complicated. So now, whether you’re working solo or managing a whole team, the thing is to match your license according to how you actually plan to use the software.

And this guide here is prepared to help you make the right choice quickly and confidently. So let’s get started.

Understand the Differences Between Commercial and Volume Licensing

The first step towards choosing a license is understanding what exactly is the difference between commercial and volume licensing. 

Let’s start with Commercial licensing first. It applies to individual users or small businesses who purchase software from the store or online. These licenses are usually perpetual (you own them) or based on subscriptions (you rent them monthly or yearly). It comes with limitations on installation, use, and portability. 

Next is Volume licensing, which is for larger organizations, as it needs multiple installations across several devices or users. These licenses offer better pricing per unit, centralized management, and more flexible terms.

Let’s understand it with an example: if you compare Windows 11 Pro and Enterprise, Windows 11 Pro is designed for both individual professionals and small teams, while Enterprise is for organizations that need advanced security, cloud integration, and scalability through volume licensing. 

Understanding what category you fall into will help prevent both under-licensing and over-licensing.

💸 Did you know?
The most expensive software license ever sold is thought to be Oracle’s enterprise solutions, which generally cost millions of dollars for their huge implementations.

Assess Your Intended Use Case and Deployment Size

See, not every license is the same. That’s why you have to consider what you are using it for: internal business operations, client-facing products, or public distribution. Every use case has a different type of license required. If you’re just getting started with development, check out these 6 tools every aspiring software developer needs to know.

  • Personal or small team: A basic license with limited device usage is sufficient. 
  • Big businesses or enterprises: For this, you may need a multi-user or enterprise license that too with remote access and cloud support.
  • SaaS or Embedded Products: People can consider developer licenses or redistribution rights for this.

A 2024 report has also claimed that over 67% of organizations are prioritizing SaaS license optimization due to rising costs and increasing reliance on cloud-based tools. (Source: Flexera 2024 State of ITAM Report)

Another thing to think about is deployment. Do it by asking these questions: Will you install the software on multiple physical machines, use it in a virtual environment, or distribute it to remote teams? 

Cloud-based license management solutions can help you in tracking and automating usage rights as your deployment scales. These tools are even more useful for hybrid or remote environments where devices and teams are distributed across locations. 

Fun Fact
There are some open-source licenses, like GPL, that ensure that once software is made open-source, any changes made to it also remain open-source. Sounds weird, but it’s like software that keeps giving!

Identify Support and Compliance Requirements

Support and legal compliance are often overlooked by people during license selection. But that doesn’t mean it is not important, especially for industries like healthcare, finance, or government.

Support Considerations:

  • Do you need any technical support or updates? 
  • Are there SLAs (Service Level Agreements) with guaranteed response times?
  • What are the upgrades or new release conditions?

Compliance Considerations:

  • Is the license compliant with both local and industry standard regulations like GDPR and HIPAA?
  • Are there any requirements for auditing or reporting?
  • Is cross-border or cross-department use allowed with the license?

If you want support and long-term reliability for your organization, go for licenses that come with high-level maintenance and legal protection.

Compare License Portability and Device Flexibility

Compare License Portability and Device Flexibility

Our work environment today is so dynamic that people switch devices, work remotely, and eventually need access to multiple platforms. And this is the reason license portability and device flexibility are so important.

Portability here means the ability to transfer a license from one device or user to another. But all licenses do not allow for this; some are bound to a single machine only. 

Flexibility is about the license’s adaptability across operating systems, virtual environments, or user profiles.

For example, if you are planning to have some frequent hardware upgrades or run a virtualized setup, a license that allows for easy transfer between devices is a must. Because the licenses that are tied to a machine’s ID will always limit your scalability and cause frustration during IT updates.

Evaluate Cost vs. Value

Last but not least, always weigh the cost of a license with its value to the company. Cheap or free options may look tempting to you, but my suggestion is to consider the possible exchanges in functionality, support, and legal exposure. 

For instance, if you’re into evaluating financial tools, this guide on the benefits of using invoicing software for your business can help you understand long-term value beyond just price.

Questions you can ask yourself while doing this are

  • Do the licenses meet all current and projected needs?
  • Are there any hidden costs (e.g., user caps, support charges)? 
  • Can the license scale as your company grows?

Well, I believe sometimes paying more is better, especially when it can give you a fully supported license, which will save more money and stress in the long run.

Now, here at the end, I want you to remember that one Software licensing will not fit all. So it’s better to take time to read the fine print, compare options, and make a decision that goes with your technical and business objectives.

FAQs

What’s the main difference between a single-user license and a volume license?

A single-user license is for installation on one device for only one user, while a volume license permits installation on multiple devices. It is mostly used by organizations with multiple users. 

Can I transfer my old software license to a new computer? 

It completely depends on the type of license you use. Some licenses allow for portability, while others are locked to the original device or user.

Can cloud-based licenses work offline?

Most of the cloud-based licenses need periodic internet access to verify usage, but some support offline functionality with limited features, too. 

What will happen if I breach a software license agreement?

Violating terms can lead you to legal action, financial penalties, and loss of access. So it’s better to ensure compliance with proper license management.

Are open-source licenses free to use commercially?

Some are, but not all of them. MIT and Apache, are licenses that generally allow for commercial use, while GPL may require you to open-source your modifications.

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