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Decoding Software Licensing: A Comprehensive Guide for Businesses

Learning everything you need to know about software licensing in this comprehensive guide for businesses.

Almost every business on the planet uses software. From monitoring work-from-home employees to communicating with customers, software can be used for just about any business function imaginable. You name the business function and there’s probably a piece of software for it.

As great as modern software is, though, it usually comes at a price. If you want to get your hands on a specific piece of software, you’re going to have to pay for the licensing.

From the outside, software licensing can seem a little alien and confusing. Most of the time, it’s not like going to your local store, buying a product, driving home, and then keeping it forever. Instead, software licensing is a little more complex than that, so let’s examine it in more detail.

Don’t worry, by the end of this guide, you’ll be a software licensing expert!

What is Software Licensing?

Software licensing is when a software developer provides their product to individuals and businesses for a fee. Essentially, you pay the fee and then you get access to the software. However, the ownership rights remain with the software developer, so you don’t actually “own” the software itself.

If that sounds a little confusing, think of it like this: when you rent a house, you don’t actually own the property, right? Well, the same concept applies with software licensing. Sure, you can use the software however you like, but it’s not technically yours because you haven’t purchased it outright.

For example, many businesses now use companies like Bytes to gain access to the latest software licensing offers from the likes of Microsoft, Adobe, IBM and others. Essentially, Bytes is the middle person who gets the best possible licensing deal for your business based on your budget and specific needs—simple! This is great, as it ultimately means you get to sit back, relax, and not worry about the licensing side of things while it gets taken care of in the background for you.

The Different Types of Software Licensing

There are several different types of software licensing that you need to know about. Here’s a closer look at them so that you can understand everything more clearly.

Public Domain License

A public domain license, also known as an open-source license, allows software to be used, modified, and shared by anyone. The software is made available for free with the main goal being to promote sharing and collaboration among users. For example, Linux is a free, open-source software operating system.

Subscription License

Subscription software licenses require the end users to pay a subscription (usually on a monthly basis) to access the software they want to use. This is the most common type of software license used today and has been adopted by countless popular software platforms, including the likes of Adobe Creative Cloud, Microsoft 365, and others.

Permissive License

A permissive license is similar to a public domain license in the sense that it generally allows the end user to modify and redistribute the software. However, there will be certain rules in place regarding modification and redistribution that must be followed to ensure the protection of the software property. These rules will be decided by the software vendor.


Copyleft licenses allow software to be modified and redistributed, providing the same rights are maintained across all the future works that follow. If the same rights aren’t followed, then the license agreement is broken.


You’re now up-to-scratch on everything related to software licensing. Software is one of the most valuable tools that a modern business has, so it’s important that you know how software licensing works and the different types of software licenses so you can stay compliant.