CAD Manager's Newsletter (#377)7 Feb, 2017 By: Robert Green
The rental software licensing model has benefits, but in order to make wise decisions for your company, you must also learn about potential problems.
In the previous edition of the CAD Manager's Newsletter, we discussed the tsunami-like effect of software companies transitioning from perpetual licensing to rental usage models. I included a checklist of action items to perform so you can be ready. (If you haven't read it yet, you may wish to do so before continuing.)
While rental software will certainly change the costs of our software tools, it'll also change how we administer and run those tools from an IT point of view. In this edition, we'll explore some of those changes so you'll be prepared to survive — and thrive — in the coming year(s). Here goes.
Licensing Terms Change
With traditional software, you buy the license, then purchase an annual maintenance agreement to receive updates. At the end of the year, you can choose to renew the maintenance agreement — or not — based on your own determination of value. In this mode of operation, you only worry about your software licensing situation once per year, and even if you decide not to renew a maintenance agreement, your software will still run.
How might this scenario change with rental? Let's ponder some possible complications:
- Multiple license periods. Software companies are now offering rental periods of a year, three months, and even one month, in some cases. While this approach does allow control for staffing up/down as project load dictates, it also makes license management a much more time-consuming problem for CAD managers because there are more license types to track, and licensing may need to be addressed more frequently than in the past.
- Token tracking. Some software products use a "token" or usage-based system to bill for software when actually used. The typical implementation is that a fixed number of tokens are purchased, which are then debited as software is used. Under this licensing system, CAD managers must constantly track token usage, which is a hassle. It can also be hard to control costs with token-based systems, unless users are restricted from use — which is yet another CAD management hassle.
- Software time-outs. With a variety of rental periods and usage tokens for various products, it becomes a real chore to keep track of how many licenses/uses are available at any given time. And if you mess up and miss a renewal deadline, the software simply stops running, which can be a serious problem for your users.
Do you have a good feel for how these factors may impact your company, based on your software product usage and software company policies? If you haven't considered these potential issues already, you need to — now! Read more »
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