Software Monetization Featured Article

Understanding the Critical Difference Between Software Licensing and Entitlement Management

December 27, 2016

Software licensing is a tricky business these days. The plethora of third-party applications and services and subscription and on-demand delivery and monetization models have only served to complicate matters. One of the biggest challenges for any business today is ensuring contractual compliance when using third-party software and services.

Ensuring compliance can be complex and confusing, and one of the first steps any company should take is to determine the difference between software licenses and entitlements, as well as the management and monetization issues surrounding them. According to a recent LicensingLIve! blog post from Gemalto (News - Alert), a company specializing in digital security, this distinction is the catalyst for understanding when corporate software assets are in compliance and being properly and fully utilized.

Licensing typically refers to the process of granting a customer the right to use a specific piece of software. It includes terms and conditions that define how that software may be legally used. However, to enforce software licenses requires legal recourse, which is usually a last resort for any organization.

For companies that want to ensure that their software licenses are being used correctly, and by the proper people and in the proper places, entitlements and entitlement management are necessary. This entitlement management system assigns rights to specific recipients and goes on to manage usage among those recipients. The system also offers granular control over rights to use a license and, subsequently, a piece of software. A company may also use entitlement management to resolve, enforce or revoke entitlements and to manage and enforce access policies for data, devices and services.

Any company working with third-party software absolutely needs to understand the nuances of licensing and entitlement management. Failure to do so could result in costly fines and penalties for misuse of software and services, or at a minimum, failure to glean the most value out of software investments.

For additional information about software licensing, management and monetization, visit LicensingLive’s Software Monetization 101 series of informational posts.