Scaling Your In-House Networks: How Software Licensing Procurement and Management Works

Jera IT support engineers, technicians and consultants regularly support clients who require professional expertise when deciding which software products to purchase, upgrading their internal networks and systems, or creating a strategic plan to develop proprietary software or applications.

For many, licensing is a key factor. A business might require the assurance that it retains full ownership of its software, has the capacity to add as many new users as it might possibly require, and can upscale its usage or add additional licences as needed.

Let’s discuss software licensing procurement and management, with insights into the contrasts between third-party SaaS or traditional solutions and what that means to your software licensing costs.

Software Licensing: Traditional vs Software as a Service (SaaS)

Software as a Service (SaaS) is one potential alternative to conventional software. The right options may depend on the types of software, applications, or operating systems you need, the amount of flexibility and scalability your business requires, and any specific requirements such as compatibility with legacy hardware and equipment.

The Basics of Conventional Software Business Licences

This type of commercial software is purchased from the provider alongside an on-premises licence agreement, which means you have the right to install the software on your servers and networks and to host it within your business systems.

Licences normally state that the software remains accessible to the business for an unlimited period. However, many providers will stipulate that the business needs to pay additional charges if they rely on the software company to provide technical support or help with integration or installation issues.

Contrasts Between SaaS Software Licensing

SaaS agreements are created between the software provider and the business, allowing the company to use software that remains hosted on the issuer’s servers rather than on the servers within the business’s premises.

This model has several advantages, especially for growing organisations with limited server capacity or who primarily operate or trade away from one central premise since they do not need to physically install a copy of the software onto their systems.

In most cases, licensing is structured as a subscription payment that recurs throughout the usage period. This permits companies to scale or adjust their usage according to business needs, such as upgrading their package or extending the number of users on a monthly or annual basis.

Many of the modern software solutions we deal with are SaaS products because the flexibility of the licensing fees and convenience of having software hosted externally and available through online connections or via cloud-based hosting is advantageous.

Additionally,  most SaaS providers automatically manage regular updates, security patches, and maintenance. This ensures that the next time an authorised business user logs in, those updates are completed in the background, with no further action required.

Pros and Cons of Procuring Traditional Licensing for Business Software

While a proportion of software has now transitioned to an SaaS model, it is absolutely possible for companies to purchase a conventional software licence. They are often able to customise the software to their needs or select elements of the functionality that make the most sense to their sector or industry.

Once the business owns the licence, it can use it independently of the provider, without reliance on a third party and without any of the risks or disruptions caused by downtime or outages.

An on-premises licence gives the business ownership of the software it uses and the data it produces and stores. This avoids potential issues around data security or scenarios where a company cannot follow data protection regulations if customer data is accessible by a third-party organisation.

Depending on the type of software you buy, you’ll also usually pay one up-front fee to purchase the software licence. Provided you have a dependable, experienced IT support team, you won’t need to budget for recurring charges or any technical support fees, which usually only arise if you need to contact the software provider directly for assistance.

Drawbacks of Conventional Commercial Software Licences

The most significant issue with this type of software licensing is the need for technical expertise to manage installation, integration, maintenance and updates because the software is hosted on your own systems – which means any changing security threats or updates are down to the business, not the software provider.

Likewise, the software is often preconfigured, without any ability to adapt it to allow access from other devices or servers, which may be unsuitable for dynamic, hybrid, and remote workforces that need to be able to log in from any device or location on demand.

For most clients, the obvious solution is to delegate any customisation projects or software management tasks to our team as their IT support provider, whether in addition to ongoing security monitoring and helpdesk services or as a new support solution.

What Are the Pros and Cons of SaaS Software and Application Licence Procurement?

SaaS licensing enables businesses to access software at their convenience, providing greater accessibility for companies with several locations and colleagues who work remotely, in the field, or from varied places.

Having software or apps hosted by the SaaS provider also makes it easier to make changes, such as decreasing or increasing the number of approved users – while noting that it is essential to check that you have the option to do so before committing to the initial licensing contract.

These software licences tend to be more cost-effective since you can adjust your usage to your needs. However, over time, a SaaS software product could cost more than a conventional perpetual software licence since you must keep up with the subscription fees to retain access.

Possible Challenges With SaaS Licensing Agreements

As with traditional software licences, there are also some caveats and pitfalls to keep in mind. While having software hosted by a third party can be beneficial, it also exposes businesses to unexpected downtime or technical connectivity issues during periods of disruption.

Businesses also require a dependable internet connection to access SaaS software services, so if you trade or work in an area with unstable connectivity, an on-premises software licence might be more appropriate.

As always, it’s important to know the costs and benefits of any software you choose to buy, the advantages and drawbacks of the licensing agreement, and the fees linked to longer-term licence management

If you have any questions about the right software solutions for your business, the value and competitiveness of your current licences, or need knowledge and advice about the right ways to upgrade or scale your digital infrastructure, please get in touch with Jera.