License costs represent a significant portion of an organization’s ERP software implementation budget. The licensing model chosen has a direct impact on these costs. The ability to use concurrent user licenses can lead to substantial savings. Unlike many of its competitors, EPICOR continues to offer this model to its customers, even for solutions available in the cloud.
A license grants the right to use software. While this is straightforward for simple applications, licensing for complex business systems can be a headache. When a company decides to purchase software like an ERP system to support its business operations, one of the key decisions it must make is the number of licenses required.
Traditionally, ERP software vendors offered their customers two models: named users and concurrent users. The first applies to situations where a specific number of registered users access the software. One license equals one user. 100 licenses mean that 100 selected employees will be able to use the ERP system. In the second case, 100 licenses still allow only 100 users to be active at once, but these can be different people. Ultimately, even 1,000 employees could periodically use the system. For example, one license could be used by a finance department employee in the morning and a warehouse manager in the afternoon.
With the popularization of software-as-a-service (SaaS) and cloud-based solutions, the concurrent user model has become increasingly rare. Most cloud ERP providers offer only named user licenses. EPICOR is an exception in this regard. Even though the company provides its systems in the cloud, it still enables them to be used based on concurrent user licenses.
This is a significant advantage. Imagine a manufacturing company operating on a three-shift basis. It has 100 users accessing the ERP system: 40 office staff working standard hours and 60 production staff. These 60 people consist of three shifts of 20 people each. They do not work in the system simultaneously. What is the difference in licensing? While named users would require 100 licenses, concurrent users require only 60—40 for office staff and 20 for one shift. When the first shift leaves, the second shift logs into the system, followed by the third. At any given time, no more than 60 users are working in the system. Forty ERP software licenses represent a considerable cost.
This is, of course, a simplified scenario. In many companies, a large portion of employees does not need to use the ERP system all day. This is likely true for accounting or sales support departments, but managers or auxiliary departments may only need to check the system occasionally. This can be organized so that they do not use the ERP simultaneously. If some employees log into the system for, say, half an hour to check information, the savings can be significant.
Importantly, you can create any number of employee accounts in the system’s administration console without having to worry about exceeding the granted number of licenses. The system handles the control itself, blocking any additional user from logging in beyond the specified limit. You also do not need to change anything in the system when someone leaves the company. In the traditional model, you sometimes have to notify the vendor to make the appropriate changes.
Potentially, the greatest savings can be achieved by global companies with offices in multiple time zones. If a company has offices in Australia or Asia, Europe, and America, it can be assumed that employees in individual branches will use the system at different times. Australians finish work when Europeans start, and Americans are still asleep. In this way, the entire organization can use a single pool of licenses. This is not a far-fetched example, as among our clients, we have a company that, while having a server in Poland, is now launching another one in Australia.
Finally, it is worth adding that the concurrent user model is not a revolution. It has been known and popular for a long time, but it became less accessible with the advent of the cloud. Despite providing its systems in a service model, EPICOR still grants subscriptions based on the concurrent user model. And this is one of EPICOR’s advantages. However, in practice, our clients’ initial estimates regarding the number of licenses needed are usually exaggerated. When we analyze the figures with them, we often conclude that far fewer licenses are sufficient. And that is where the concurrent user model provides tangible savings.
