Software licensing without the legal headache
Licensing is the least interesting part of a software purchase and the most common source of unpleasant surprises: a renewal that doubles, a licence audit that finds forty installations against thirty seats, a contract that does not allow the subsidiary to use the system.
Two models dominate. A subscription gives you the right to use the software while you pay, with updates and support included - low entry cost, no ownership, price subject to revision at renewal. A perpetual licence is bought once for a specific version, with maintenance sold separately and usually annually; higher upfront, cheaper over five years, and your responsibility to keep current.
Then there is how seats are counted. Named users are cheap to manage and expensive when 60 people each log in twice a month. Concurrent licences suit shift work and shared terminals. Server, core or site licences cover unlimited users on defined hardware. The wrong counting model can double the bill without adding a single user.
Clauses worth reading before signing
- -Renewal terms. Is there a cap on the price increase, and how much notice do you get before auto-renewal?
- -Scope of use. Group companies, contractors, external auditors - who is allowed in, and does a test environment need its own licence?
- -Data and exit. Export format, retention after termination, and how long you keep read access to your own records.
- -Support scope. What the included tier actually covers, response times, and the price of the tier you will need in production.
Keep a simple licence register: product, edition, quantity, start and end date, owner inside the company. Ten minutes a quarter of maintenance turns a licence audit from an incident into a formality, and it stops you paying for seats belonging to people who left last spring.
As an authorised distributor, Digict LTD issues the licences, keeps the paperwork consistent with the vendor's terms and handles renewals, adding seats and edition changes as a single contract change rather than a new negotiation. If your legal or procurement team needs a specific clause, we take it to the vendor for you.
Licence models, in plain terms
Four models cover almost everything on the market. A perpetual licence with annual maintenance is a purchase: capital expenditure, yours to keep, with updates that stop if maintenance lapses. A subscription is a rental with the updates included and the right to walk away. Concurrent licensing counts simultaneous sessions rather than people, which suits shift work - twenty warehouse operators across three shifts may need seven licences. Capacity models price on transactions, documents or gigabytes and behave well until your volume doubles.
Match the model to how your team actually works. Seasonal or shift-based operations overpay badly on named users. Office teams with stable headcount usually overpay on capacity models. The question is not which model is cheaper in the abstract, but which one tracks your usage pattern.
Clauses worth reading before signing
- 01Renewal uplift. Ask for a cap in percentage terms for years two and three. Without it, a first-year discount is a loan you repay at renewal.
- 02Audit and true-up. How usage is measured, how much notice you get, and whether an overage is billed retroactively or from the next period.
- 03Termination and data export. Notice period, export format, how long your data remains available afterwards, and who deletes what.
- 04Processing and sub-processors. A data processing agreement, the storage region, and the list of sub-processors with a notification duty when it changes.
- 05Escrow for critical on-premise systems. If the vendor disappears, what happens to the code that runs your warehouse.
Negotiate the second year, not the first
Discounts are easy to get and easy to lose. Price protection, a seat floor rather than a ceiling, and a defined exit are harder to get and worth more. Multi-year commitments are reasonable when they come with a break clause tied to service levels, and unreasonable when they only bind you.
Keep an entitlement record. One page listing what you bought, when, for how many users, with the contract reference. It turns a licence audit from a fire drill into a two-hour task, and it makes the renewal conversation factual.