Different types of licensing models

Licensed Software applications are managed in a variety of methods. These methods differ in:

  • The license management interface and process,

  • License allocation and availability,

  • Compliance to licensing agreements,

  • Usage chargeback considerations.

License vendors should be aware of the different opportunities and disadvantages resident in each of these methods. System administrators and license managers should also heed the capabilities and prices that are embedded in the different options and methods of software licensing. This document is a brief review of these different available licensing models.

License dongles or license usb keys

Copying data from a flash drive
This is an electronic device provided by the software vendor, which enforces copy protection and authenticity validation of a licensed application. The hardware key is programmed with a singular product key and is attached to an external bus of the computer to enable work with the software. This form of licensing is very rigid, unconfigurable and lean on features. Consequently – dongle licenses are typically the cheapest form of supplied licenses.

Software node locked licenses

This type of license is merely a software implementation of the former one: Prior to enabling the application on the designated computer, The vendor would provide a license key or license file specific to that machine. The result is a rigid – format license per machine.

Floating licenses, Network licenses, Concurrent license

These are synonyms to the same concept of possessing expensive licenses in a smaller number than the maximal number of users. Floating licenses effectively shares software assets among users on a network, time-dividing licenses according to a queue of demand; When a user requires a license, a request is made to a central license server, which in turn either grants the request or refuses it according to availability or predefined constraints.

Floating licenses often involve a certain form of “contract” that articulates the quantity of acquired licenses and the policy of permitted usage. This license file may be either physically provided by the vendor or reside in trusted storage on the network.

Some Concurrent License Management systems provide methods of excluding limited quantities of licenses from the collective license pool, to assign them to specific users or workstations, for either a predefined period or indefinitely. These methods would also be elaborated in the license file.


License Borrowing

“License Borrowing”, also referred to as “License Commuting” or “Offline license” is a method of providing application usage privileges in the absence of connection to the central license server. This is an effective solution for travelling businessmen and engineers, that need to work using a laptop computer.

The Borrowed licenses’ option is usually the most expensive form of licensing; Usage is counted as the entire period in which the license was extracted from the pool. It is recommended to return license servers to the pool as soon as possible.

Host locked, Node locked licenses, Single Use licenses

These are synonyms to licenses that are allocated to specific workstations. This option is defined in the licensing files or “Options files” provided by some license management systems. Connecting a floating license to specific workstations decreases license maneuverability, but in turn it ensures the productivity of certain staff members, and generally lowers the cost of licensing in the organization.

Named users

Similar to having licenses tied to workstations, there is also the possibility to connect a specific license to a predefined user. the advantage of the latter is the user’s capability to apply their usage rights once, on each of the organization’s workstations.


OpenLM is an Application Usage Management tool, which monitors license usage on every type of the license models as described above. OpenLM can either query the central license manager for license usage, or manage workstation specific license – dongle applications by introducing the OpenLM Agent module on each of the ‘Dongle’-ed machines.

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