Leave a comment to tell us what you think of this topic! When establishing a business licensing agreement, certain pitfalls should be avoided. These pitfalls can devastate a software company. First of all, the simple approach and only the provision of full access to a website or the unlimited use of a software program is not recommended. Some companies opt for this model, but it can be problematic. This approach limits your ability to be properly compensated for the use of your product. Many licenses also include a monitoring clause to regularly check whether the product is being used under the licensing conditions. If such additional audits and licensing conditions are not indicated, the benefit of a licence is weakened. In addition, most licenses have a fixed period. When an entity intends to acquire software license rights for an ongoing business function or for an ongoing project, it is important to confirm that the release period covers the timing of that initiative or project. You`ll be surprised if these companies aren`t new to the software industry. While they may not be pure software companies, they certainly put most of the features of their products into software of any kind – either incorporating it into hardware or selling subscriptions that are only run on certain devices. Most of them even offered some kind of ELA program for larger companies – but usually only by invitation.
As companies prepare for migration to SAP S/4HANA, licensing management has become an even more pressing concern. Find out how SoftwareONE can help. Enterprise Licensing Agreements (ELA) are contractual agreements that balance supplier and customer incentives to provide selected software at reduced and fixed prices over a specified period of time. Despite the reduction in profit margins, ELA suppliers protect steep discounts for purchases in high dollar packages. Cisco, for example, has traditionally offered large companies an ELA focused on cooperation or security. These agreements provided customers with a catalogue of premium products offering licensing coverage to all their „knowledge workers“ or „security content users.“ Depending on the client`s definition of business, this would include license coverage for its on-site and remote employees, as well as for all contractors.