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How to define "Site" in "Site License"?

We offer software developer's tools and from time to time we get an inquiry on pricing for a site license.  The problem I have always had with this is what exactly constitutes a "site" - an entire company, a division, a building, a department, what?  A site license for Microsoft is going to have quite a few more seats than a site license for Bob & Ethel's Web Design Shoppe.  What is fair?

For those of you who offer site licenses, I'd also like to hear what rationale you used to calculate the price.

Happy New Year to all ...

Mitch & Murray (from downtown)
Tuesday, December 31, 2002

I think the norm is physical address (so building would be a 'site')... but I could be wrong...

Tuesday, December 31, 2002

We have used physical street address in the past, which was something of a norm in the software industry, but it wasn't very satisfactory. People would complain about telecommuters and distributed teams and whatnot.

Since then what we do is ask people "how many users would be covered by this site license?" and give them a price quote that's based on the number of users covered by the license.

Joel Spolsky
Tuesday, December 31, 2002

Thanks, Joel.  Is this truly a site license though?  Can the customer add more seats at the same location and still be considered fully licensed?

Mitch & Murray (from downtown)
Tuesday, December 31, 2002

Why even offer something called a "site license"? Why not a sliding discount by volume (with a cap at some point)? Then there's no gray area.

Ryan Eibling
Tuesday, December 31, 2002

The site license is so that the IT department doesn't need to wory about tracking who is actually licensed for the software, so they can just slap it on every PC without thinking about it or accounting for it.

Tuesday, December 31, 2002

w.h. hits one out of the park.  The whole idea behind a site license is not cost savings, even though that frequently is one of the benefits - it is instead "no hassle" license compliance.

Most USA colleges and universities, for example, site license all their mission critical software, and Microsoft is only too happy to oblige.  The site licensed version of Windows XP does not "phone home" to the Borg Server for activation and validation, hence one image can be blasted around the whole joint and all installs will be in full compliance of the license.

Mitch & Murray (from downtown)
Tuesday, December 31, 2002

Our "site license" is based on physical street address.  As far as telecommuting:  if you have a desk at that address, you're kosher.

Distributed teams are another issue.  Maybe use a "corporate license"?  The key points are that the customer understands your licensing scheme and thinks it is fair.

Joe Paradise
Tuesday, December 31, 2002

What about some sort of combination liscense.  You could offer your basic site liscense (which they can install as many times as they want at a certain physical addresss) for a certain fee, and that could include X number of "off-site liscenses" for tele-commuters etc.  There should also be an option to purchase more of the "off-site liscenses".

I think one thing that is key, is to work with your clients on an individual basis.  We are working right now with a large vendor on some liscensing and they are just being plain stubbron and won't customize their pricing at all to what we need and it is leaving a very bad taste in our mouth.

Matt Watson
Thursday, January 2, 2003

Legal entity? If you have problems with Microsoft being larger than M&P's go with something that involves per seat stuff.

Just me (Sir to you)
Thursday, January 2, 2003

I think that the concept of a "site license" is very nebulous. The very concept of a "site" can be complicated, what with telecommuters,

Here are some quick thoughts on some of the variations on "site licenses" that I've dealt with over the years:

1. Volume discounts.
This is probably the easiest solution, from the perspective of the software producer.

You can simply offer a sliding scale of volume discounts, and provide "license to use" certificates for your customers, along with a reminder to keep up to date on licenses for new users. IT departments generally hate these schemes, since all the responsibility for enforcement lies with them.

2. Floating licenses.
If you're willing to invest the engineering effort, it's possible to actually enforce a policy of "not more than X users" by requiring the use of a network license server.

These sorts of licensing schemes can be a real pain in the neck for your customers, unless your software is inherently client-server in nature.

If you do go with a floating license scheme, consider what you want to do when the site (inevitably) exceeds their licensed usage. If you make it easy to purchase additional licenses, you'll be more likely to get a positive response from your customers.

3. Per-building licenses.
Easy for the customer, and easy for you, at least on the accounting side. On the other hand, what if the company decides to shift employees around, for instance?

4. Per-company licenses.
As you might expect, the main problem with a really broad license like this is determining what a fair price should be. If 30 people are using your software today, what happens when the company expands, and 300 people are using your software?

It's also important to consider what constitutes "the company". If the company you licensed the software to gets bought out by a huge multi-national conglomerate, you probably don't want the license to transfer...

5. Geographic licensing.
One software package I used was licensed for use by "all employes of (our company) that worked within 4 miles of (some street address)". I never really did understand the intent of these terms.

When we moved, the company was very responsive to the idea of modifying the license, but it was pretty annoying to not be able to use the software when telecommuting.

Bottom line - you can put whatever terms you want to into a "site license", but you should consider what burdens you'll be putting on your customers, as well as your own organization.


Mark Bessey
Thursday, January 2, 2003

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