Fill ‘er Up: A Self-Service Look at a Tankful of Usage-Based Licensing Models

By Mike Wozniak | General Licensing Tips

Jun 20
gas pump

When it comes to pay-per-use or consumption-based licenses, we here at SoftwareKey have come up with some fairly amusing nicknames for the various usage-based models which we imagine could be useful:

  1. Gas Tank” – The user purchases a block of credits (or virtual tokens) in advance and exhausts the supply over time, just like filling up your car at the corner gas station and driving from one destination to the next, consuming gasoline along the way.  When the gas tank is nearly empty and you’re practically running on fumes, you can return to the gas station to “Fill ‘er up!”  This requires the user to take the necessary action to replenish the fuel supply.
  2. Taxi Meter” – The user starts out with zero (0) credits and, as they consume usage of the software, credits are accumulated. When they are finished using the software (or at regular billing intervals), they pay for their usage. This is similar to climbing into a taxi cab, asking the driver to reset the meter, and then paying the driver (not including tip!) once the user’s trip is complete.
  3. SunPass” – Here in sun-soaked Florida (hence the name “SunPass”), highway drivers can display a pre-purchased transponder on their windshields to conveniently pay for tolls without having to stop at tollbooths (thanks to a concept known as open-road tolling, in which SunPass-only lanes support full highway speeds). When a driver’s online SunPass account is linked to a major credit card, the driver can establish an initial amount of credits (say, for example, $50.00) in his SunPass account. As the driver proceeds through each toll station, the amount of the toll is deducted from the remaining balance. When the driver’s balance dips below a $10.00 threshold, SunPass automatically charges the driver’s linked credit card $40.00 to bring the prepaid account balance back to $50.00. The primary advantage of this model is that automatic billing can be combined with consumption-based licensing.
  4. Mobile Plan” – Some customers want to combine the idea of subscription-based licensing with usage-based licensing, similar to how most wireless phone plans work. You may pay $59.99 for 750 minutes. If your consumption for the month exceeds 750 minutes, you will be assessed an overage charge at the end of your billing cycle.
  5. Mobile Plan with Rollover Minutes” – Some wireless providers go one step further and will allow you to carry over the unused minutes to the next month. For example, if you are paying $59.99 for 750 credits but consumed only 500 credits during the current billing cycle, the unused 250 credits would be available to you during the next month’s billing cycle.

Interested in learning more about licensing models? We cordially invite you to check out the first installment of this series where we present an in-depth look at other varieties of software licensing models you may wish to consider for your next software project.

In the meantime, we would love to hear your feedback on these ideas and we will certainly share more ideas as we think of them!

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About the Author

Mike Wozniak is one of the co-founders of SoftwareKey.com and responsible for marketing, content and product strategy. When he isn't plotting new ways to help customers solve licensing and business automation challenges, he likes to travel and entertain guests who come to visit the Orlando area. He also writes most of the licensing tips here.