Choose Software Licenses Wisely

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Choose Software Licenses Wisely

When purchasing software products, there are frequently license options that consumers do not even know exist.   Knowing and understanding the different license types (and associated benefits and/or restrictions)  is key to optimizing any software purchase.

Each software vendor is free to devise their license types, and set of rules for how that software may or may not be used.   So, be sure that you understand specific licensing terms of any software you purchase.   Generally speaking, though,  the common license types are:

  • Retail
    Typically, retail products may be purchased by anyone. Traditionally, retail licenses  were associated with “boxed copies” you might by in a store, but nowadays you can often purchase retail copies online and then download them.Retail copies are typically limited to a single desktop PC, and may or may not allow you to transfer them to another PC.    Frequently, retail licenses specifically forbid use of the product on a terminal server.Also with retail copies, you need to be sure to save proof that you hold a legitimate  license.   Some vendors may require a certificate of authenticity or the original receipt of purchase.
  • Original Equipment Manufacturer (OEM)
    OEM software is typically purchased along with a computer.   OEM licenses are usually more restrictive than even retail licenses, but the price discount may be well worth the trade-offs so long as the software still meets your needs.You still need to be able to prove that you hold the software license, but that is sometimes easier with OEM products because it is associated with the record of your equipment purchase.OEM software is rarely allowed to be transferred to another PC.
  • Cloud-based / Software as a Service
    Also known as the Subscription Model, cloud-based software (such as Office 365) has several advantages to both consumer and vendor.    For the consumer, the cost of software purchases is strung-out in smaller payments, and they are usually entitled to the most up-to-date version.  The vendor benefits from a steady-stream of revenue and may increase the lifetime revenue of each consumer (by collecting regular payments from consumers who may otherwise hold-out on upgrades).  The true benefits and disadvantages of cloud-based software varies by vendor and product.   It is a licensing model that should be carefully explored on a product-by-product (and sometimes user-by-user) basis to determine the best option.Cloud-based software is frequently portable to other PCs (indeed, it can often be used on more than one PC at a time).   Businesses often benefit from the ability to centrally manage cloud licenses.
  • Corporate
    Corporate licenses, as the name suggests, are specifically designed for businesses.    They include features and benefits that frequently makes them worthy of increased cost (as opposed to retail or OEM alternatives).For one thing, if you want to run a software product over the network (such as you do when you use a Remote Desktop terminal), usually corporate license allow you to do this, while lower-cost licenses often do not.Corporate licenses are usually portable to other computers.  These licenses are also are usually managed through a vendor’s portal, making them much easier to administer and prove software entitlement.   This reduces administrative overhead and errors throughout the product lifecycle.Also, with corporate licenses there is typically more freedom regarding the version of the software application that you run.   If you are inclined to run an older copy of a software product (for either consistency or compatibility), corporate licenses will frequently allow you to do this.Finally, corporate licenses may be less costly — over time — than other license types.   OEM and retail licenses typically have relatively shorter lifespans because they are tied to a single PC or the license keys are lost.   With cloud-based licenses you continue to pay the entire time you use them.    With corporate licenses, however, you may be able to leverage a single product for up to a decade without any additional expense.
  • Government
    Government licenses are a lot like corporate licenses, but (obviously) designed for government purposes.
  • Home
    Home licenses are typically designed only for home use, and for-profit business use is strictly prohibited.      The primary benefit to a home license is reduced cost.These licenses are usually a bargain, and anyone can — and should — consider buying them for home.   They usually are not “legal” to use anywhere else, though.
  • Student/Academic
    These discounted license types are available only for qualified students and educators.   Qualified individuals can often purchase and download these products with little difficulty.These products may have significant advantages over home licenses.   If you think you may qualify, it is well-worth checking into.Before you buy, though, check with your school to see if you are entitled to a free copy through your school.    Some schools (particularly major colleges) have licensing agreements that entitle their students, faculty, and staff to a completely free copy of certain software.    This is a surprising but extremely valuable benefit to many students.
  • Not-for-Profit (NFP)
    Not-for-Profit licenses — as the name suggests — are available only to qualified not-for-profit organizations.    They frequently require pre-authorization from the software publisher, and then can often only be purchased through a specific distributer.Usually, these licenses have the same benefits as corporate licenses, but come with a steep discount.     For qualified not-for-profits, this is probably not only the lowest-cost way of getting software, but also the way that maximizes benefits.If you run a Not-for-Profit and aren’t already purchasing software this way, you’re probably missing-out.   We highly recommend you explore this option anytime you purchase software.


In addition to the license type, also consider that some software we traditionally consider part of a software suite (such as Microsoft Excel being a component of Microsoft Office) is often sold as a standalone version at a lower cost than the entire suite.    Typically, if you need more than one of the products in the suite, you are better off with the whole suite.   If you only need one of the products, though, you may be able to dramatically cut the cost of your purchase.

Software purchases can be a major investment that has consequences far into the future.   We recommend being an informed consumer, and to work with reputable distributer to be sure you’re getting genuine product and a license optimized to the way you use it.