bCentral Home
Your Online Business Center

Buy it right

Software licensing isn't rocket science - it just seems like it

Buying software isn't quite as simple as you might think. For a start, you don't actually buy the software itself. Instead, when you pick up a copy of Windows XP, you're actually buying is the right to use that software. That right is called a licence, and there are a number of different types.

It's no wonder then, that licensing can seem confusing: do you licence the same software for everyone in your company? Is it worth registering? Can I be compliant and conserve cashflow? The people whose job it is to explain licensing to small businesses say: it needn't be rocket science.

Not a priority?

Quote�Money is important, so you don't want to spend more than you need to.�End Quote
Nigel Williams

"You still come across companies with Microsoft Office loaded on every machine and no physical licence whatsoever," sighs Nigel Williams, the managing director of Birmingham-based Advanced Networks Design Ltd, which specialises in supplying software to smaller businesses. "Money is important, so you don't want to spend more than you need to - but licensing is often seen as complex, or not a priority."

Williams warns that if you build up your software licences in an ad hoc way, adding them one or two at a time, you can end up paying too much. While volume licensing deals - where you licence software for a set number of users - can appear complicated, he says it's not as intimidating as many businesses think. "With volume licensing, you can save 20 per cent of your costs immediately," he says, "I'm a small business myself. I understand, so I try to keep the explanation as simple as I can."


When you install software, you might be asked to register it. The benefits of this might not be immediately clear, but they exist all the same. "Until six months ago we had no registration scheme," says Michael Peters, a director at software company Mapsoft. While users were expected to buy the software, they didn't have their own serial number.

He now understands why the serial number is important. "You might think it's just a random number, but when you call, it tells us what product you have, the version and what platform the client is using. It's incredibly useful for us when we give you support, and can save a lot of time and effort on both sides."

Fear of the unknown

"It's fear of the unknown that stops people saving money," says Julie Strawson, a marketing manager at Monotype Imaging, which holds the rights to around 95% of the fonts in use on our personal computers.

With the explosion of in-house graphic design, web page design, presentations and desktop publishing, Monotype finds that around 80% of its fonts are being used without licences, and one of Strawson's tasks it to bring that figure down.

She accepts that often businesses will have hundreds of fonts, which, if they were all licensed separately for every employee, would cost a small fortune. "We can build a bespoke licence for people who talk to us," she says, "You don't need to licence every user." Concurrent licensing - available for many types of software - means that you only pay for a certain number of people to use it at the same time, even if the users change. It has actually proved to be a cash-saver for many users: "We saved magazine publisher Future Publishing �25,000," Strawson says.

Buy or rent

Another way to keep your licences in order and preserve cashflow is to rent your hardware and software, rather than buy it. It is maintained, upgraded and licensed by a software provider or reseller - and you don't have an up-front purchase cost. "Why own your IT?" asks Williams at Advanced Networks Design. "There is usually a return on that investment from increased productivity and support inside six or nine months. If you pay by the month, you can feel that benefit immediately."

��Like what you've read? Try our free newsletters.

What next?

Our Licensing Chooser can help you find out which licence is right for you.

An IT consultant can help you buy the right licences for your business. Find one in your area.

Do you think software licensing's boring? Then you haven't played our game. Evade the viruses and navigate the maze to win.

Sign into Microsoft Small Business+ for free web-based training, online chat help and software support.

sign in
Security information

Find a local Microsoft Small Business Specialist to help with your IT needs


Microsoft Small Business Specialist  More info >

Do you sell through your business website?

Do you sell through your business website?

Free business newsletters - subscribe now

Our free newsletters are packed full of business advice and ideas - plus all the latest news

Security information

Get the latest bulletins and updates direct from Microsoft