Concurrent License

A concurrent license, sometimes called a floating license, counts simultaneous users rather than individual people. If an organization owns 50 concurrent licenses, any 50 people can use the software at once, drawn from a much larger group. When one person finishes, their license is released and becomes available to the next. A license server or the vendor's service tracks how many licenses are in use and blocks new sessions when the limit is reached.

Concurrent licensing suits software that many people need occasionally but few use at the same time, such as specialized engineering, design or analysis tools. It can be far cheaper than buying a license for every user. For IT financial management, the key questions are how many concurrent licenses are really needed and whether the higher price per concurrent license is justified by the number of people sharing each one.

Definition of Concurrent License

A concurrent license is a license model in which the right to use software is measured by the maximum number of simultaneous sessions or users, rather than by named individuals or devices. Any authorized user may use the software as long as the number of active sessions does not exceed the number of licenses owned.

It is one of several software licensing models, and contrasts most directly with the named user license, which assigns each license to a single person.

How Concurrent Licensing Works

Concurrent licenses are usually managed by a license server, either installed by the organization or provided by the vendor. When a user opens the software, it requests a license from the pool; when they close it, the license is returned.

If all licenses are in use, the next user must wait or is denied access. Some systems allow users to borrow a license for offline use for a limited period, removing it from the pool until it is returned.

The license server records usage over time, which provides valuable data for deciding how many licenses to buy.

Pricing and Ratios

Concurrent licenses typically cost more than named user licenses for the same software, often two to three times as much, because each one is expected to serve several users.

The value depends on the ratio of total users to peak simultaneous users. If 150 people share 50 licenses, the ratio is three to one, and concurrent licensing is cheaper as long as each concurrent license costs less than three times a named license.

Vendors are increasingly moving to named user and subscription models, so concurrent licensing is less common for new SaaS products than for established engineering and technical software.

Importance of Concurrent Licenses in IT Financial Management

Concurrent licenses are often used for specialized, high-cost software, where the difference between buying enough and buying too many can be large.

Getting the number right requires usage data rather than estimates. Teams asked how many licenses they need tend to estimate high, to avoid being blocked, while license server records show how many were actually in use at the busiest times.

Because licenses are shared, decisions affect many users at once, so too few licenses can disrupt work.

Balancing Cost and Availability

Too few concurrent licenses cause denials, where people cannot use the software when they need it, which costs time and productivity. Too many leave licenses idle, wasting money.

The right number is usually set by peak demand, with some tolerance for occasional denials depending on how critical the software is. License server data showing peak use and denials over time is the best basis for this decision.

For global organizations, time zone differences can raise the ratio of users to licenses, since people in different regions use the software at different times.

Comparing With Named User Licensing

Whether concurrent licensing saves money depends on the price premium and how usage is spread. Comparing the cost of each model, using actual usage data, is a routine part of renewal analysis.

Concurrent licensing tends to suit occasional and shift-based use, while named user licensing suits people who use the software throughout the day.

Some organizations use both, with named licenses for heavy users and a concurrent pool for occasional ones, where the vendor allows it.