3.10.3. Licensing Models and Compliance
💡 First Principle: Software licenses are contractual obligations. Using software beyond its license terms—intentionally or accidentally—exposes the organization to legal and financial liability. License management is not optional; it's governance.
Licensing Models Reference
| Model | How It's Counted | Common Use |
|---|---|---|
| Per-instance | Each running instance of software | Database software, some middleware |
| Per-concurrent user | Maximum simultaneous users | Terminal services, some ERP |
| Per-server | Each server running the software | Some server software |
| Per-socket | Each CPU socket | Some enterprise software (Oracle DB) |
| Per-core | Each CPU core | Windows Server, SQL Server |
| Site-based | Unlimited use within a site/organization | Enterprise agreements |
| Node-locked | Tied to specific hardware (MAC/serial) | Some design/engineering software |
| Subscription | Recurring payment for continued use | Microsoft 365, most cloud software |
| Open source | Free to use under license terms | Linux, many tools (check GPL vs. Apache terms) |
License Compliance Activities
- True up: Annual reconciliation where actual usage is reported to the vendor and additional licenses are purchased to cover any over-deployment. Common in volume licensing agreements.
- License count validation: Auditing how many instances are deployed vs. how many licenses are owned. Done internally before vendor audits.
- Volume licensing: Purchasing licenses in bulk for lower per-unit cost; typically includes Software Assurance (upgrade rights).
Version Compatibility
- Backward compatible: Newer software works with older data formats or systems
- Forward compatible: Older software works with newer data formats (less common)
- Maintenance and support: The right to receive updates and vendor support. Licenses without current maintenance may run legally but receive no patches or support.
⚠️ Exam Trap: Open source is not the same as "free to use for any purpose." GPL-licensed software has specific requirements (modifications must also be open-sourced); Apache-licensed software is more permissive. "Open source" doesn't mean zero licensing obligations—it means the source code is available.
Reflection Question: A company purchases 100 per-core licenses for a database platform, then migrates the database to a server with more CPU cores. The workload is the same. Does the company need to purchase additional licenses?
