What is limited licensing?

A software license grants you the rights to run or access a software program. Many clients and software purchasers falsely believe just because they bought a piece of software they own it and can do what they want with it. Refer to Chapter 12, ‚“Legalese, ‚½ for more information on who owns the code. You can use the software, but ongoing requirements exist determining how the software can be used. These requirements include the number of computers the software can be installed on, ownership transfer, and generally any restriction the software vendor wants to include. These restrictions are spelled out in the End User License Agreement (EULA) often displayed during installation and require the user to agree to it before continuing installation. There are several different types of EULAs. There are EULAs for vertical market or fully packaged applications, original equipment manufacturer (OEM) licensing, volume licensing, educational, charity and government use licensing, and evaluation licensing.

Visual FoxPro developers are most familiar with the vertical market EULA for Visual FoxPro. We aren ‚ t going to go over the Microsoft EULA in any great detail in this section. We don ‚ t have the legal expertise to decipher all of it. However, software developers, no matter the distribution method (shareware, freeware, demoware , crippleware , nagware ) should license the software they develop. So how should you go about doing this? The EULAs provided with shrink-wrapped software developers use everyday can be used as a licensing framework. Evaluate the audience you are developing software for, and then decide what type of license you need. You may not agree with Microsoft ‚ s licensing structures, but they provide models for all of the types mentioned. Adapt yours based on what you like and don ‚ t like about Microsoft ‚ s and other licensing agreements you have come in contact with over the years . Then take it to your computer law attorney for final approval.

Along with restricting how software can be used, licensing can also be used for revenue generating purposes, unless you distribute as freeware. Think of how long it took you to develop that software. How can you recoup some of your investment? Licensing fees. Normally developers who create custom applications are only paid by the project or per hour to complete the project. What if that application is for a very large organization? A developer could structure the license agreement to include fees for every 10 users accessing the system. It is up to you and your legal professional(s) to determine the best licensing structure for you.

Distribution licensing is another sector of software licensing and revenue generation. The applications and the databases developers create using Visual FoxPro are distributed royalty- free, which means you or your clients aren ‚ t required to pay any additional distribution royalty fees to Microsoft. Microsoft doesn ‚ t get any additional revenue from the sale of a Visual FoxPro developed product installed on a client site. There are some software products that require payment of distribution royalty fees if you distribute the product in a vertical market application. Developers try to stay away from situations like this because it adds another layer of complexity to the development and distribution process. This isn ‚ t a very popular option, none the less it is an option you can use.

So what does this mean to a software developer? You have choices. You have to decide based on who your clients are, what the application does, how many users can use your system, what market you are in, etc. All of these factors help determine your licensing structure. These are the many choices developers have to make when setting up a licensing structure for their product.