How much does a software license cost?
Software license costs depends on the type of software, the type of license and the pricing model. There may be a one-time fee that gives the user ownership rights to the software program. This approach is considered the traditional way of owning software — buying the license up front and gaining the rights to use the software indefinitely. This kind of purchase agreement is known as a perpetual license.
Alternatively, the user may pay an initial fee followed by a subscription plan where payment is made at regular intervals.
License costs are often based on the number of users and devices that use the software. They may also depend on the software deployment method. Costs can increase with add-ons, upgrades, maintenance fees and other fees. Depending on these factors, software license costs can vary from free or nearly so, to many thousands of dollars.
Tracking software licenses and costs can be particularly difficult across ritualized servers, mobile devices and the cloud operations.
What does a software license agreement include?
End-user license agreements typically include basic information about the parties entering the agreement, such as full names of the parties involved, contact information and address of the parties. It also likely includes information on the following:
- charges owed per user;
- terms of cancellation and terms for recovery of charges if cancelled during the period covered by the original agreement;
- maintenance, upgrades and support that is included;
- user rights for copying the software and making modifications;
- exclusivity or non-exclusivity of the software to any one customer; and
- how many devices will be allowed to use the software;
- when the conditions of the agreement go into effect (i.e., the moment the user accepts the terms and conditions);
- the duration of the agreement;
- distribution permissions and limitations;
- software performance guarantees;
- the number of eligible users;
- disclaimer of warranties;
- transfer ability of the license to another business or person;
- governing law and which entity will have jurisdiction over legal disputes about the license.