SaaS or a Software Licence – Do You Know The Difference?

The software industry is one of the fasting growing and developing industries there is in the UK. People are developing innovative and game changing pieces of technology usually driven by software at an extraordinary rate. Of course the best technology in the world is potentially worthless to its creator unless it can be monetised and provided to customers who are willing to pay for it. This is the point at which many of our clients walk through the door.

They have created a cracking piece of software but are unsure under what terms to provide it to their customers. Many phone up and request a software licence, others ask for a more dynamic sounding SaaS (Software as a service) agreement. However many don’t have the slightest clue about the difference between the two or what it means to them. This article sets out to highlight the difference and guide developers and customers as to which is the most appropriate way of to deal with business software.

Generally speaking the decision to utilise a SaaS or a licence starts with an examination of how the software is going to be provided. A software licence is traditionally used in instances where a digital copy of the software is being provided. Ten years ago this would have meant providing a disc for the customer to install on their systems.

Fast forward to today and rather than a disc many customers download the software directly onto their machines from the internet. Accordingly, a SaaS is generally more appropriate in situations where the customer is provided a set of credentials to access the software online. The customer up to this arrangement gets a service, i.e. use of the software subject to payment not a digital copy of the software on their machine or in their office. The customer is essentially offered a subscription to the service.

What are the Practical Differences?

Download my complete article on this subject to find out what effect choosing a Software licence or Saas has on:

  1. Costs to the provider and consumer.
  2. How this affects software customisation.
  3. Maintenance considerations.
  4. Data security and management.
  5. Intellectual Property Considerations.
  6. Commercial Considerations.

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