EPICOR Strengths: licensing models
License costs make up a significant portion of an organization’s ERP software implementation budget. Their level depends, among other things, on the method of licensing. The possibility of having licenses for concurrent users allows for significant savings. Unlike many competitors, EPICOR continues to offer its clients such a model, also for its cloud-based solutions.
A license grants the right to use Software. While in the case of simple applications, the matter is relatively straightforward, in the case of highly complex business systems, licensing issues can cause headaches. When a company decides to purchase Software, such as an ERP system, which will support the operation of its business, one of the decisions it must make is the number of licenses it will need.
Traditionally, ERP software vendors have offered their customers two models: for named (specific) users and concurrent (unnamed) users. The former refers to a situation where a certain number of registered users use the Software. One license equals one specific user. One hundred permissions mean that 100 particular employees can use the ERP system. In the second case, 100 grants can still be used by only 100 users simultaneously, but the users can alternate in time. Possibly, even 1,000 employees can use the system at different times, not simultaneously. For example, a single license can be used by a finance department employee in the morning and a warehouse manager in the afternoon.
With the popularity of the cloud-based Software as a Service usage model, the concurrent usage model declined. Most cloud-based ERP vendors offer licenses for named users. EPICOR is among the exceptions in this regard. Although the company makes its systems available in the cloud, it still provides concurrent user licensing.
This is a considerable advantage. Imagine a manufacturing company that operates in three-shift mode. One hundred users use the ERP system: 40 office workers during standard office hours and 60 production staff; however, they split into three teams of 20 for each shift. They do not work on the system simultaneously. What is the licensing difference? While 100 licenses would be required for named users, only 60 licenses are needed for concurrent usage – 40 for office workers and 20 for a single shift staff. When the first shift goes home, only then does the second shift log into the system, and then the third. No more than 60 users work in the system at any given time. And forty licenses of ERP software represent a considerable cost.
This, of course, is a simplified scenario. After all, in many companies, a large proportion of employees do not need to use the ERP system all day long. This is probably the case for the accounting department or sales support teams, but the management or auxiliary departments need to look into the system only occasionally. It is possible to arrange this, so they do not use the ERP simultaneously. If some employees log into the system for, say, just half an hour to check some information, the savings could be significant.
Importantly, any number of employee accounts can be set up in the system’s administration console, and there is no need for monitoring that the number of licenses used does not exceed the total number acquired. This is done by the system itself not allowing any other user login that would result in exceeding the defined number—no need to update the system if an employee leaves the company. With the traditional model, sometimes the software vendor had to be contacted and requested to enter the relevant changes.
Global companies can achieve the most significant savings with offices in several time zones. Suppose a company has an office in Australia, Asia, Europe, and America. In that case, it is safe to assume employees in each branch will use the system at different times. The Australians finish work when the Europeans start it, and the Americans are still in bed then. This way, the entire organization can use a single pool of licenses. And this is not a fanciful example because we have a client company that has a server in Poland and is now going to commission another one in Australia.
Finally, it is worth mentioning that the concurrent user licensing model is no revolution. It has been known and famous for a long time, but with the advent of the computing cloud, it has become less available. Despite making its systems available in a service model, EPICOR still provides subscriptions in the concurrent use licensing model. And this is one of EPICOR’s advantages. However, the practice is that our customers’ first estimates of the number of licenses needed are usually exaggerated. When, together with them, we analyze the numbers provided, we often conclude that far fewer of these licenses will be enough. And then, the model for concurrent users offers substantial savings.
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