What is the Difference Between Named and Concurrent User Licenses?

Software User Licenses

A user license is a legal agreement between the software provider and the purchaser that establishes the client’s right to use the software and which features they can access.

Many CRMs, like Salesforce, are cloud-only and cannot be hosted on-site, necessitating these agreements so that a client can access the copy they bought, as ownership still belongs to the software company. These are termed End User License Agreements (EULAs), and if this contract isn’t signed, the client can’t access the proprietary software at all. These licenses generally stipulate how the software may be installed, used, and distributed within the company.

The structure of these user licenses varies, even within a software publisher. For example, Infor CRM offers four different types, although such variety is fairly unique to Infor and most vendors offer just one or two options, generally named and/or concurrent user licenses. Named user licenses are most common.

Named User Licenses vs. Concurrent User Licenses

As the term might suggest, a named user license is individualized. Only the person named – hence the term – in the CRM software may access the software on a single, specified system, but this user has full access to the software. In Infor CRM, a named user license allows the user to log in via the Web Client, the Mobile Client, and the Outlook Client (also known as “Xbar”).

On the other hand, a concurrent user license allows a group of people to effectively share a license, although the caveat to this is that only one user per license may be logged in at any time. Once that user logs out, another user from the user group may log in and use the software under the concurrent user license.

For example, in a four-user concurrent user license setup, four employees, regardless of who they are, can simultaneously access the software, but another user is unable to log on.

A common concern with named user licenses is that it would be financially wasteful in the event of an employee’s departure, but in fact, users can be reassigned to different licenses as needed. For example, a new hire may initially be added to a concurrent user license until a named user license is available, and thereafter the user can be re-assigned to the new user name once added to the software system. There is no fee involved, and the system administrator can simply effect this change.

Concurrent user licenses, if structured cleverly within a company, may end up being less expensive, especially as the number of employees increases. For example, instead of having to buy each employee in a company of nine their own named user license, just three concurrent user licenses could be purchased if the company operates in teams of three. Such a system would work well for a company that provides, say, a 24-hour support service, if those groups of three employees worked 8-hour shifts.

In a typical 9-to-5 office situation, however, where everyone has to be logged in to the software, named user licenses would most likely be more suitable.

Which License is Right for You?

How a user license can best support a normal workday for a company is often the deciding factor when choosing between license types. In fact, with software publishers like Infor that provide several different types of user licenses, a company can mix the types they own and utilize, making allocation very flexible, as ownership of these licenses is not mutually exclusive.

Unsure about which user license type is best for your company? In addition to named and concurrent user licenses discussed here, there are several others, so you’re not alone in your confusion. We help companies every day make this important decision. We’re happy to discuss some of the biggest differences between your options and help you get a little closer to a decision – contact us.