Why Software Licensing Is Important
As a software developer, software license agreements protect the investment of time, resources, and energy, ensuring that you will be able to make a profit from your hard work.
For businesses acting as users, being aware of software licensing is particularly important because you don’t want to unnecessarily pay for licenses that you aren’t using. Before any software can be installed, it has to be legally licensed. Otherwise, it would be considered a breach of copyright law to use the software. While acquiring too many can be a waste of a company’s resources, having too few can leave the company vulnerable to a costly potential lawsuit. Additionally, software license agreements can make managing the company’s software way easier, so it’s important that you find the right one.
Some of the other motivations for obtaining a software license agreement are because it:
- Gives you the chance to disclaim warranties. Customers have certain expectations any time they purchase a product, and your software is no different. By incorporating a disclaimer of warranties in your license agreement, you can require the user to accept the software as available or as-is, putting the risk on them.
- Allows you to license the software without selling it. You can let customers pay for a license of your software while maintaining all rights to it, allowing you to license it out with restrictions placed on its use. This essentially gives you more control over how your software is both used and distributed and gives you the chance to make more money over time.
- Limits your liability. Limiting your liability is extremely important because it helps protect your company against potential lawsuits.
- Allows you to freely revoke licenses. Including this section of the agreement gives you the freedom to revoke or suspend licenses at any time, and for any reason, helping you keep complete control over the software.
- Prevents customers from abusing your software. Without getting a signed licensing agreement, there’s nothing stopping your customer from attempting to copy your software for their own benefit. Usually, customers that try to copy software do it so that they can install it on multiple computers, saving them money, but they could also try to sell it for a profit. Either way, this could cost you potential income.