# ERP Licensing Models Reference: Named User, Concurrent, Subscription and More

> Source: https://netray.co/tools/erp-licensing-models-reference
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

A searchable lookup of the licensing and pricing models ERP vendors use, with what each one measures and where the cost surprises hide.

## Category

erp-migration

## Audience

- CIO
- ERP project lead
- Procurement

## Tool

**Kind:** worksheet

**Mode:** reference

**Columns:**

#### Licensing model

**Key:** model

**Type:** text

#### What is counted

**Key:** basis

**Type:** text

#### Typically suits

**Key:** fit

**Type:** text

#### Where costs surprise buyers

**Key:** watch

**Type:** text

**Rows:**

**Model:** Named user

**Basis:** Each identified person with a login

**Fit:** Stable, well defined user population

**Watch:** Shared or role-based logins breach terms; leavers must be reassigned

**Model:** Concurrent user

**Basis:** Peak simultaneous sessions

**Fit:** Shift work, many occasional users

**Watch:** Peak definition and measurement method; session timeouts

**Model:** Full-use / professional user

**Basis:** Users with broad create and edit rights

**Fit:** Planners, buyers, accountants

**Watch:** Tier is set by the most capable role the person holds

**Model:** Limited-use / light user

**Basis:** Users restricted to approvals, self-service or read access

**Fit:** Managers, approvers, shop floor entry

**Watch:** Vendors can reclassify you if rights drift beyond the restricted role

**Model:** Employee-based

**Basis:** Total employee headcount

**Fit:** Enterprise-wide access, HR-heavy suites

**Watch:** Cost grows with headcount even if few people use the system

**Model:** Perpetual license plus maintenance

**Basis:** One-time fee, annual support percentage

**Fit:** Long planned on-prem deployments

**Watch:** Annual maintenance uplifts and cost of re-licensing on version changes

**Model:** Subscription (SaaS)

**Basis:** Recurring fee per user, module or tier

**Fit:** Cloud ERP with predictable growth

**Watch:** Renewal uplifts, price caps absent from the contract

**Model:** Module-based

**Basis:** Each functional module licensed separately

**Fit:** Phased roll-outs

**Watch:** Adding a module later is priced at then-current list

**Model:** Tiered by revenue

**Basis:** Company revenue band

**Fit:** Mid-market suites

**Watch:** Revenue growth silently moves you to a higher band

**Model:** Transaction or volume based

**Basis:** Orders, invoices or documents processed

**Fit:** Distribution, EDI heavy businesses

**Watch:** Seasonal peaks and integration traffic inflate counts

**Model:** Consumption based

**Basis:** Metered compute, storage or API calls

**Fit:** Variable workloads, AI and integration use

**Watch:** Hard to forecast; ask for caps and alerts

**Model:** Device or workstation

**Basis:** Registered terminals or scanners

**Fit:** Shop floor, warehouse handhelds

**Watch:** Shared devices still count; new scanners add cost

**Model:** Site or enterprise license

**Basis:** Unlimited use within a legal entity or site

**Fit:** Large user counts at few sites

**Watch:** Acquisitions and new entities may fall outside the grant

**Model:** Database or instance based

**Basis:** Number of production instances

**Fit:** Multi-company consolidation

**Watch:** Non-production environments often charged separately

**Model:** Indirect or digital access

**Basis:** Third-party systems reading or writing ERP data

**Fit:** Heavily integrated landscapes

**Watch:** Integrations, portals and bots can trigger extra licensing

**Model:** Bring your own database license

**Basis:** Customer supplies the DB engine license

**Fit:** Existing enterprise database agreements

**Watch:** Database vendor audit exposure sits with you

**Notes:** General descriptions of common models. Each vendor defines its metrics in its own contract, so always confirm definitions against the actual order form and license terms.

## Content

**Intro:** ERP cost comparisons fall apart when vendors count different things. This reference lists the licensing models you will meet in an RFP response, what each one actually measures, and where buyers are usually caught out.

**Sections:**

#### How to use this lookup

**Body:** Search for the model name a vendor used in its quote, then read the right-hand column before you compare prices. Two quotes with the same headline number can differ by a wide margin once you convert both to the same unit, such as total cost per active user per year over five years. Ask every vendor to state the metric, the measurement method and the audit rights in writing so you can line the answers up side by side.

#### Named versus concurrent counting

**Body:** Named user licensing is simple to audit but punishes organizations with many occasional users. Concurrent licensing looks cheaper for shift operations, yet the vendor decides how a session is measured and what happens at the peak. Model your real login patterns for a full month before choosing, and ask whether read-only and approval-only users are free, discounted or counted at the full rate.

**Bullets:**

- Count users by role, not by department
- Include integration accounts and service users
- Ask how leavers and role changes are handled

#### Subscription and consumption pitfalls

**Body:** Subscription pricing moves cost from the project budget to the operating budget, but it also introduces renewal risk. Look for a cap on annual increases, a right to reduce quantities at renewal, and clarity on what happens to your data on termination. Consumption pricing adds a forecasting problem: AI features, API calls and storage can grow faster than headcount, so ask for usage alerts and a hard spending ceiling.

#### Common mistakes

**Body:** The most frequent errors are comparing a perpetual quote without maintenance to a subscription quote with support included, ignoring non-production environments, and forgetting indirect access from portals, EDI and reporting tools. Another is buying every module on day one when the plan is phased. Price each phase explicitly and lock the price for later modules in the contract.

**Cta:** If you want a second opinion on how a vendor's licensing terms will translate to your real user and integration pattern, Netray can review the quote with you. The reference above works fine without us.

**Faq:**

#### Is named user or concurrent licensing cheaper?

**Answer:** It depends on usage. Concurrent suits shift patterns where few people are logged in at once, while named user suits a stable team. Measure peak simultaneous sessions and total distinct users for a month, then price both options before deciding.

#### What is shelfware in ERP?

**Answer:** Shelfware is licensed software or user seats you pay for but do not use. It usually arises from buying all modules up front or over-sizing user counts. Phase purchases and negotiate the right to reduce quantities at renewal.

#### What is a license true-up?

**Answer:** A true-up is a retroactive charge when your actual usage exceeds what you licensed, found through a vendor audit or self-reporting. Understand the measurement method and the price used for the excess before signing.

#### Do integrations need their own licenses?

**Answer:** Sometimes. Some vendors charge for indirect or digital access when third-party systems read or write ERP data. Ask the vendor to confirm in writing how your portals, EDI, reporting tools and bots are treated.

## Search terms

erp licensing models, named user vs concurrent user licensing, erp pricing models, erp subscription vs perpetual license, erp license types explained, erp shelfware, erp true-up, erp licensing comparison

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