Study Shows Enterprises Favor Concurrent-User Software Licenses

By John Pallatto  |  Posted 2005-10-12 Print this article Print

Enterprises prefer concurrent-user software licenses over per-processor licenses despite the recent advent of multicore processors, according to a new study.

SANTA CLARA, Calif.—Enterprises are not making a significant move to processor-based licensing despite the wide discussion over the past year about the value of these licenses prompted by the advent last year of multicore CPUs. This is one of the key finds of the second annual study on software pricing and license policy sponsored by the Software & Information Industry Association, the Centralized Electronic Licensing User Group and Macrovision Corp. The findings were presented at this weeks SoftSummit conference on software pricing, licensing and management.
Only about 6 percent of enterprises that participated in the survey indicated that they preferred per-processor licenses. Instead, more enterprises and vendors are moving toward concurrent-user licenses, which have increased 11 percent to a total of 53 percent of the survey respondents.
Concurrent-user licenses allow a set number of people to use a software package at any given time. It is up to the buyer to monitor software usage to ensure that they are in compliance with the license terms and arent exceeding the total number of concurrent users they have paid for. However, the survey also showed that license compliance is a major problem because 72 percent of enterprises reported they either tracked compliance through error-prone manual methods or not all. The result is that many organizations are likely out of compliance, the study found. To improve compliance, 38 percent of enterprises are saying that they would prefer to work with some kind of digital compliance model rather than a self-tracked compliance model enforced by a written contract. This is a 6 percent increase over last years study. Click here to read the details about the licensing policy that Microsoft has announced for its Windows Server System products. The preference for digital enforcement is still greater than using the online log-ins required by hosted software-as-a-service providers, which are favored by only 12 percent of enterprises. The study found that more software vendors are moving toward subscription-based annual or monthly licensing terms and fees and away from perpetual license terms. The number of vendors offering subscription terms increased 7 percent to 40 percent of the vendors surveyed compared with 60 percent offering perpetual licenses. The study predicted that the number of vendors that offer software subscriptions will reach 60 percent by 2007. It also found the enterprises that that prefer to acquire subscription licenses increased by 7 percent to total of 43 percent. The one license enforcement model that is clearly dead is the hardware dongle or USB device attached to the computer that enables users to install and run applications. The study showed that only 2 percent of enterprises supported using this antiquated method. Currently only 13 percent of enterprises are using this hardware-based method. Next Page: Revising obsolete pricing.

John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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