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Perpetual Subscription Consumption-based
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can also be combined with other types of licenses . To stay with the last example , some cellphone contracts require a monthly payment on top of the data package . For Infrastructure-asa-Service providers ( IaaS ), CBL is becoming an increasingly attractive option . Users can e . g ., buy additional server capacity when a limit is reached , or there are no limits , but the actual amount of data is tracked and must be paid for .
How do they differ from perpetual and subscription licenses ?
CBL are quite unlike other types of licenses , like conventional one-off perpetual licenses or subscriptions .
With conventional licenses , the user pays once for the software and either becomes its outright owner or gets an unlimited , unrestricted license . In many cases , this is combined with a maintenance subscription . The traditional model is still the norm in B2B business , but it is fast falling out of fashion for consumers because of its drawbacks : There is no incentive for the developer to keep improving the product , and the upfront cost can be a too high threshold for some people .
Subscriptions are the more flexible option . With them , the user does not buy the software outright , but instead pays for a temporary right to use it . As long as the subscription is not cancelled , it keeps getting renewed , and the user can go on enjoying the software . For private consumers , this has become quite normal . Spotify , Netflix , or Adobe are just some of the big names in the market offering monthly service subscriptions . The advantage over a perpetual license is the lower entry threshold for new customers . And they receive a product that is always kept up to date . In turn , the providers have an easier time with attracting new customers and a steadier , more predictable cashflow . Subscriptions have proven their power as the fitting solution for balancing customer loyalty and generating revenue with the needs of the end user in mind . The model is the right choice in particular for products that work with regularly updated content .
Why do I need CBL ? What are its pros and cons ?
In many cases , CBL can be the ideal choice for customers and vendors alike . This holds true in particular when the key factor is maximum flexibility in terms of volumes , usage periods , or the time of use .
Before going with a CBL model , one should consider whether a different model is a better fit to the specific conditions and requirements on the ground . Power users might benefit from paying for a full , perpetual license . Subscriptions might be better if the product is used steadily and regularly . CBL might be the best choice when flexibility is paramount .
The costs can develop in very different ways depending on the chosen model . The chart shows how perpetual licenses mean high upfront costs that stay the same over the entire period . A subscription comes at an initially low cost , but that cost is incurred repeatedly at regular intervals , whereas the costs of a CBL license would change and develop in response to the actual use . It is easy to see how the choice of licensing model depends on the needs of the user .
To return to our initial example : Neither buying a washing machine nor paying for a laundry service subscription would have made sense for me . The machine ( or the service ) would have gone unused during vacations or semesters spent abroad . Paying for actual use , i . e ., for the laundromat , was the ideal choice for my flexible and changing demand for fresh laundry .
Companies can often benefit from CBL models . If there is no upfront fee at all , there is essentially no risk to it , and the entry threshold is mini- mal . If the software is not used , you do not actually pay for anything . The software would typically be used when this promises a benefit that outweighs the cost of paying for it . In a sense , the software pays for itself during use . This makes CBL an easily calculated choice , as it links the investment directly with the gains . Flexibility and scalability are the great advantages here .
For companies whose demand and needs change by the season or with every project , CBL are a way to manage their cost situation by avoiding the need to spend money for software that is not used when the business is slow . And when things pick up again , the software is there , waiting to be used .
What do I have to do to offer CBL ? What can Wibu-Systems do for me ?
Wibu-Systems gives you an extremely easy way to sell your software with a consumption-based business model . Our CodeMeter License Central lets you cover all conceivable scenarios : Do you want to bill your clients for the period of use , or for the times that they use a certain feature ? All this is easily done with Wibu-Systems technology .
Conclusion CBL are an exciting way of getting your software into new markets and to new users with modern , flexible , made-to-fit licensing models .
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