How to choose the right license model for your software product

The license model you choose shapes your revenue stream, your customer relationships, and your product development priorities. There is no single right answer — but there is a framework for finding yours.

Perpetual licenses

Best for: desktop applications, CAD tools, creative suites, and on-premise enterprise software. Customers pay once and use the software indefinitely. Revenue is upfront but lumpy — you rely on new sales and upgrade fees for ongoing income.

Subscriptions

Best for: SaaS products, cloud services, and any software where ongoing updates are part of the value. Recurring revenue provides predictability, but requires continuous value delivery to prevent churn.

Trial licenses

Best for: any product where prospects need hands-on experience before buying. Time-limited trials with clock-tampering detection reduce abuse while letting customers evaluate the full product.

Floating (concurrent) licenses

Best for: engineering teams, enterprise departments, and server-based tools where not everyone needs simultaneous access. One pool of licenses serves many users — cost-effective for the customer, predictable for you.

Node-locked licenses

Best for: per-workstation licensing, embedded systems, and kiosk deployments. Each license is bound to specific devices via hardware fingerprint. Prevents sharing while allowing legitimate transfers.

Usage-based licenses

Best for: API services, AI/ML inference, and metered products. Customers pay for what they consume. Revenue scales with customer success, but requires robust metering infrastructure.

Licensio supports all six models out of the box. You can mix and match across products — all sharing the same Ed25519 token format and SDK.