Software Licensing: Changing Terminology without Changing the Lingo

By Molly McDevitt

As the software landscape evolves, those in software asset management roles must keep up with the ever changing terms and conditions of software licenses. Perpetual licenses are falling by the wayside and rapidly being replaced by Software as a Service, Cloud, or sometimes a complex licensing metric based on physical hardware. But what about known terminology that may be used for more than one purpose? Take, for example, the word “subscription.”

When subscription licensing first came on the scene, it was easy to understand. You paid an annual, fixed term, or month-to-month fee to use the software, or you didn’t use it. Easy.

Now the word “subscription” is being used in conjunction with maintenance agreements. The term “subscription support,” or “subscription maintenance” is becoming more commonplace. However, the terms do not have a universal, common meaning. Savvy software asset managers must be vigilant and know exactly what is being offered with these new terms.

Generally, “software subscription,” “support maintenance,” “software assurance,” or any combination of those words, gives you a fixed term of support, often one year, on a software title. It may include patches, bug-fixes or incremental product upgrades, or even new versions, within the paid term of the support agreement. In some instances, you can forgo this additional expense and choose not to pay maintenance on a software title, but still retain the right to use the software, and in some instances still receive patches and bug-fixes, but not upgrades to a new version.

Subscription maintenance can come with other caveats. If you are a company that runs more than one version of title, and you historically have only carried support on the most current version, you may find that, if your support agreement has become a subscription, it also has an all-or-nothing clause. You must cover all of your licenses, regardless of version, with subscription maintenance, or you can be found out of compliance, in an audit.

Another reason it is important to know if you are purchasing a subscription license, or a license with subscription support, is how your finance department views these purchases. A traditional subscription license for a software title may be considered an expense line item. A perpetual software license may be considered an asset, while its subscription maintenance may be an expense item.

Be sure to read carefully when your software purchase includes the word “subscription” and make sure you know just what you are getting, or getting your company into.

About the Author

Molly McDevitt is the IT License Administrator for Mentor Graphics Corporation.