Software tip: Software pricing based on usage

Steve Daum

For 20+ years we have been selling our software based on a per-workstation license. The idea is that for each computer where the software is installed, the user must purchase one license. This has worked well and we will continue to offer this option into the future.

One of the trends we are watching is software licensing based on how much it is used. There are different usage-based pricing models but most of them tie the price to how many people use the software rather than the number of computers where it is installed. In the past, the technology for managing this type of license added complexity to the installation and deployment experience. With networks, the internet, and new license tools, the usage-based license model is becoming more appealing.

Our first step in this direction was the recent release of SQCpack, CHARTrunner, and GAGEpack under a concurrent-user pricing license. With a concurrent user license, you may install the software on as many computers, at your location, as you like. However, only the licensed number of users may run the software at any given time.

In the future, we see even more flexible licensing models becoming available. For example, on a new SPC monitoring product we are about to release, the license is based on the number of metrics monitored. This way a small location with fewer metrics to monitor will pay less than a large corporation monitoring thousands of metrics. Once again, this model will allow for the software to be installed on many computers, but the price will be established based on usage.

Let us know what you think about usage-based software licensing.