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Software Licensing Models Compared

A licensing model is the rule that decides what a customer may use, for how long and how much. Most products end up with two or three of them, for example a free trial, then a subscription, with a few premium features sold on top. In Labs64 NetLicensing every product module uses one licensing model, and a product can have as many modules as you like, so mixing models is easy.

Comparison

Model What it limits Where it’s used What your app sends on validation NetLicensing page
Perpetual Nothing once bought Desktop tools sold once Nothing extra Try & Buy with the shortest evaluation period
Trial (Try & Buy) Evaluation time, then a purchase Downloadable software with a free trial Nothing extra Try & Buy
Subscription Calendar time, renewable Monthly or yearly licenses, maintenance plans Nothing extra Subscription
SaaS plans The plan and its features Free, basic and premium tiers; freemium Nothing extra Pricing Table
Feature-based Single features or editions Lite, pro and enterprise editions; add-ons Nothing extra Multi-Feature
Node-locked Number of devices or named users Workstation software, hardware-bound licenses A node secret (fingerprint) Node-Locked
Floating (concurrent) Sessions at the same time Engineering and enterprise tools shared by a team A session ID plus check-out or check-in Floating
Usage-based Credits used API calls, processed documents, compute time The quantity used or reserved Pay-per-Use
Quota Capacity Seats, storage, projects, requests per day Nothing extra; your app compares its own usage with the quota Quota
Rental Time per instance Devices or assets, each licensed for its own period Nothing extra Rental
Discount Price Promo codes and campaigns in the shop Doesn’t apply Discount

Picking a model

Start with how customers pay: once (perpetual), per period (subscription or SaaS plan), per use (pay-per-use) or per unit of capacity (quota).

Then decide whether there’s a trial or a free plan. Try & Buy has a trial built in, Subscription can hand out a free period automatically, and Pricing Table can have a free plan.

Next, what does one license cover? It could be a device (node-locked), a concurrent user (floating) or an account or tenant, which is simply the licensee itself. For named users, either use the user ID as the licensee number or use node-locked with the user ID as the node secret.

Last, if some features are sold separately, add a Multi-Feature module, or list the features per plan in Pricing Table.

Combinations we see often

Scenario Combination
Desktop app with a trial and a yearly license, two devices per customer Subscription with a free automatic license, plus Node-Locked with quota 2
SaaS with free, pro and business plans and paid add-ons Pricing Table plus Multi-Feature
Team tool sold as concurrent seats per year Subscription plus Floating
API product with prepaid credit packs Pay-per-Use, with Subscription for platform access if you charge for it
Fleet of devices, each licensed for its own period Rental

How to license a product using multiple licensing models shows how to set this up.

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