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Getting your Software Licensed is Important

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Every year, companies tend to spend a lot of money either buying or selling the usage rights to a software or any related services. This is why software licensing agreements have become more important than they ever were for both, the customers and IT companies as well.

As software is becoming more frequently used in our everyday lives, we should be aware of important concepts relating to software such as its licensing. Even though software licensing can be a tough concept to grasp, we should at least be aware of its ins and outs in order to improve our overall experience and software innovation.

What is Software Licensing?

A software license is a legal instrument which allows the customers to use and redistribute the software. If anyone uses the software without the license agreement, it would result in a
breach of copyright law.


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The license agreement will also help explain to the user how they can access and use the said software. Before you can install any software, all of them needs to be licensed.

The software licenses become confusing when we come to the different types of agreements and licenses which show the different rights attached to the software licenses.

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Different Methods for Licensing your Software.

As reported by Market Research.biz, software license management market was valued at $447.6 million globally in 2017. According to a report from Market Research,  majority of the global software license management market by application is dominated by B2B software.

The report also states that Europe are leading the way with America coming in a close second to dominate the global software license management by region and Europe is expected to account for a market revenue share of $203.9 million come 2020 which is almost half of the current total market.

There are some options when it comes to getting your software licensed one of them is EULA (End-User License Agreement). This is one way, that the vendors can choose in order to license their software.

The end-user license agreement is a contract between the purchaser and the licensor which helps establish the rights of the purchaser to use the software.

This contract might include the different ways the software can be used along with the rights if any that the buyer has obtained by purchasing the software. This is one of the most commonly used ways to license software.

If you are using SaaS, your applications are bound to be cloud-based. Here the software license will usually be subscription based. This means you will have to pay for each and every user on a regular basis.

This kind of software license allows you to have more flexibility. This will be beneficial to you as you will only be required to pay for what you actually need. This, in turn, will help your business scale without facing any repercussions.

There will also be the condition whether you will be able to re-sell your software license once you are done using it. There is no straightforward answer to this condition. You can usually look in the EULA to find out the answer. There can be some loopholes found from the legal point of view but let us not get into depth about the law.

Another way to license your software is by white labeling it. In this instant, a product is created by one company and after it is created, it is then re-branded by another company. This means, that the software belongs to the company who created it in the first place. There is also a license for software in place will allow the company to benefit from the white label to use the software.

Why Software Licensing is so Important:

Businesses have to be smart while purchasing the licenses first and foremost to ensure that they will be using the software legally and secondly, to make sure that they are not paying for the licenses that are not being used.

If you acquire a lot of software licenses, you are wasting precious company resources and if you are not acquiring enough licenses, your company will be liable to potential lawsuits which are going to be way costlier. Finding the correct license agreement will make it much easier to manage the software in your company.

Above post was submitted by Prince Kapoor. You can get in touch with him at princekapoor.com

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Paschal Okafor is NaijaTechGuide Team Lead. The article Getting your Software Licensed is Important was written by Manoar Molla. The article was last modified: December 7th, 2018