One major shift to migrating to cloud services was the move from capital expenses to operating expenses. With capital expenditures, we typically pay for assets up front, and own and maintain those assets. On the other hand, with operating expenditures, we are paying for a service, or furthermore, the right to use that service/application/system. Services that leverage operating expense models rely on licensing. When we purchase technology services today, whether they are cloud hosted or not, we are often going to be dealing with licensing. There are three major types of license models: perpetual, subscription, and Bring Your Own License (BYOL).
Perpetual Licensing
A perpetual license is a one-time-purchase license that gives you the right to use the service/application/system for the lifetime of that application. There is no recurring cost with this license model.
Subscription Licensing
Subscription licensing is becoming more and more common as we adopt and consume more cloud services. In contrast to perpetual licensing, with subscription licenses, we incur ongoing, recurring costs to use the given the application. Typically subscription licensing will need to be purchased on a monthly, yearly, or multi-year basis. This will depend on the available contracts of the service.
Bring Your Own License (BYOL)
The goal of the BYOL model is to bring flexibility to purchasing licenses. BYOL licenses are meant to be able to be used either in an on-premises or cloud environment. For instance, if you have a software license (that is of the BYOL type) applied to an application running in an on-prem data center, you can move that application to a cloud hosted server and be able to leverage the same software license without having to re-purchase the license.
Licensing, especially of the subscription type is something that many of us are getting familiar with on a daily basis. We levearge subscription-based licensing services for products like collaboration applications, streaming video, and streaming music. It will be interesting to see how licensing and license models evolve and change over the years.
Featured image photo credit – A.J. Murray
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