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Challenges in License and its management in Cloud
Ways of Managing Cloud License
The Four Approaches for License Management 
Key Takeaways 
Last Updated: Mar 27, 2024

License and their Management in Cloud Computing

Author Aditya Singh
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Ashwin Goyal
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Earlier, when the computer industry came to know that the software application on the internet had impacted them, the companies licensed their software then switched to cloud license management. But still, companies are facing the issue because there was no standard description of charges applied over the cloud network for using the application.

Whenever a client purchases a software application or subscribes to using a software product, that software application is based on some terms and conditions. These agreements are also known as EULA (End User License Agreement).

Most of the time, the subscription price of software is directly linked to the License or EULA.

Given below are some requirements which are necessary to present in a license agreement or EULA:

  • Software should get installed in any system at any number of times.
  • The client should own it.
  • It should empower many networks.
  • The independent software having any perimeters can be visited.

                                                 Source: License management in Depth 

Challenges in License and its management in Cloud

Many issues which are faced in license management of cloud computing are of advanced version as compared to the earlier versions:

  • Licensing terms and conditions lag shifting business models and technologies. Business models include leasing, rental, outsourcing, etc.
  • Licensing models are based on challenging metrics to control and measure—for example, client access licenses, rather than a simplistic ‘per-install’ metric.
  • Challenges include discovering installed software and how many times it is used, mainly in virtual environments. 
  • Challenges in managing the licensed, purchased inventory include knowing what is owned and following the associated terms and conditions of given mergers of world dynamics, reorganization, and divestitures.
  • Challenges involve complex and mixed ownership of the license entitlement. For example, software and client-server are owned by separate entities.
  • It is worth noting that licensing is not a problem for technical people, but it can be for others.
  • The outsourcing mindset is that license management and compliance are the other party’s responsibility, whether provider or consumer.

In Cloud Computing, license management does not exist on its own. A significant infrastructure of the servers, PCs, mainframes, etc., will present the running need to manage licenses in the surrounding. Upcoming license terms and conditions allow the permit to be used by changing between traditional and Cloud platforms. It also will closer usage of the complete license management system.

Source: Adobe Stock

Many companies typically address license management with many different approaches, with the procedures for cloud environments simply complex versions of the typical behavior. Sourcing and contractual approaches are attempts to reduce the need for license management. The mashup approach is a realistic description of the current processes used to manage licenses across the complex infrastructure of the Cloud actively.

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Ways of Managing Cloud License

Multiple ways are essential for maintaining the License and its maintenance in cloud computing. With a good understanding and plan, a company or client can maintain their application license and License of their software and services.

Given below are some of the methods for maintaining a cloud license:

  •  Sync all License renewals: By finishing the license renewal, then at the same time administrator deployed with the managing licenses became aware of coming renewal times. Nowadays, various cloud licenses are getting increased. The number of clients subscribing to cloud services is rising, and people are also unsubscribing from the benefits throughout the year. It is possible that a group of experts may forget some renewal dates or may improperly renew a license.
  • Research Licensing model before purchasing: Various cloud providers have different licensing models. Any model can be good depending on the need for other virtual servers and the inclusive infrastructure. Let’s, take an example: Citrix Xen server licences, Citrix clients as a per-server model, whereas VMWare license is a per-socket model.
  • Using Hybrid Licensing Model: Most of the applications are based on a per-user basis, many of them are per-device, and they may have some other levels. Every cloud license has its model, and each model has its benefits. They are often based on the server provider and its client.
  • Agreement Negotiations: When we work with a cloud service provider, we always negotiate the level number and the cost of the License. Cloud service providers seek clients of their business. They often work to track the worth and license to meet the cloud needs of the client.

The Four Approaches for License Management 

Given below are the four approaches for license management in cloud computing:

  1. The Sourcing Approach: In the sourcing approach, the license management attempts to remove or minimize the requirement for license management by choosing an application that doesn’t need the control of metrics, which is not simply measurable in the context of cloud computing. FOSS (Free and Open-Source Software) is usually used in cloud computing partly for this reason.  
    Although the sourcing approach will limit the direct financial impact of licensing, it will not remove the requirement for good software management and, in some ways, quickly shifts the nature of the exposures to be managed.
  2. The Contractual Approach: In the Contractual approach of license management, it attempts to remove or minimize the requirement for license management by assigning such responsibilities to other parties, generally an outsourcer.  
    Although the responsibility for licensing and license compliance must be cleared in contractual management such as outsourcing, there are normal limits and potentially significant cost implementation depending on the terms and conditions mentioned and how the ownership is structured.
  3. The Mashup Approach: The Mashup Approach depends on various tools and approaches, generally combined in a highly manual way. Nowadays, most license management is practiced using the Mashup approach because of the complexities of dealing with all of the other licensing models, limitations, and specialist concentration of the various tools. We also use the Mashup approach in corporate environments where different subsidiaries or operating units have various sets of tools and systems for asset management.  
    This approach works with significant difficulties and with the danger of significant deficiencies in coverage and accuracy.
  4. The Structured Approach: This approach is still evolving through the projects. It depends on developing and exploiting a simple technological architecture for asset management in cloud computing. Parts of the architecture are already present in their respective place, others are in development, and some need to be developed. As these components are adopted into the present Mashup approach, the ability to manage to license competently and cost-effectively will increase. These developments are not exclusive to cloud computing, and they are important and significant parts of the answer for cloud computing.         


  1. Why is it essential to know the software license in cloud computing in the IT sector?
    A software license establishes the rights of all parties involved with the software: the author, the provider, and the end-users of the software product. It explains the relationship between company products and consumers and how the Cloud should use them.
  2. What is licensing in cloud computing?
    Licensing in the Cloud allows the application sellers to provide customers with real-time data to magnify profits and reduce costs. The key to migration data, centralised records, license information, etc.
  3. What are the advantages of software licensing?
    The benefits of software licensing include portability, privacy, and profitability. It is also known as 3Ps. 
  4. What is the permission that is granted by the software product license agreement?
    A software license permits the end-user to use one and can be more copies of the software. If the software product is used without a license agreement, it is copyright infringement.

Key Takeaways 

This article discussed the meaning of a License agreement in cloud computing. We also learn what management is in the License of cloud computing. Challenges in managing the License in cloud computing. 

We hope this blog has helped you enhance your knowledge regarding Service Level Agreement in Cloud. Please check out these articles to improve your understanding:  Introduction to Cloud ComputingIaaS vs SaaS vs PaaS.

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