The evolution of software license models

LicenseTracker’s Rick Ingram looks at software license business models from shrink-wrap to ‘remix.’

Calgary-based startup LicenseTracker has just published an analysis of the evolution of software licensing business models. Over recent years, software vendors have adapted to changes in technology and are now offering a variety of licensing options. Traditional software licensing offers either single user-single license, multiple users-shared license and temporary or fixed period licenses. While such models have evolved with technology innovations, they may not fully satisfy business requirements for balancing productivity and efficiency, estimating software needs, adjusting to changing needs and dealing with new requirements late in a fiscal year.

License tracking

Detailed analysis of actual software usage using license tracking technology is an enabling technology for many new licensing models which do address these issues. Such models range from user classification through pay-per-use and product family ‘remixing’ to technology partnerships. The latter provide increasing value to technology consumers and at the same time increase end user commitment to the vendors.

Licensing models

The LicenseTracker paper offers an evolutionary taxonomy of software license models, from the straightforward ‘one license per user’ model though more sophisticated floating license models. But even today’s sophisticated license models may not completely balance the conflicting goals of productivity and efficiency. Denial of access to core software can have a negative impact on productivity. On the other hand, purchasing an extra license that may only be used 1 or 2% of the year is inefficient.

Log data

Today, most concurrent use license managers provide usage logs with information on who used what software, for how long, as well as details of any denials of access. New tools like LicenseTracker can be used to analyze such usage data and optimize software license counts, departmental charge backs and budgeting. Such information can also help vendors design new licensing models.


The paper concludes by advocating a new ‘remix’ license model that entails a tighter business relationship between vendor and users. Here the client’s investment goes into vendor’s technology rather than a specific license. Access and use of a range of products is then monitored and the results used to adjust billing to complex usage patterns—the remix model.

Read the full LicenseTracker paper on or visit

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