When it comes to licensing for ITSM solutions, understanding the different types of licenses available and choosing the right one can significantly impact your business’s efficiency and budget.  

While many subscription vendors only offer named licenses, some vendors also offer a more flexible concurrent license. Each has its advantages and situations in which it might be the better choice.  

Many SaaS solutions only use a named-user licensing model, which can be costly for certain organizations. To offer more flexibility to customers, some software vendors provide concurrent licenses in addition to named licensing. 

What are named user licenses? 

Named user licenses, also known as fixed user licenses, are assigned to individuals who plan to use the system. Once a license is assigned to an individual, only that person can use this license to access software. The license is considered consumed, regardless of whether that person is using the software or not. This type of license is tied to the user’s identity and requires a unique username or ID.

By assigning licenses to specific users, software companies can control who has access to their software and prevent unauthorized use. This level of control assists in controlling budget and software spend and ensuring license compliance.

Named licenses are a simple, easy-to-manage licensing option for organizations with a well-defined user base. They provide a clear record of software usage, which can help simplify license management and ensure compliance with software license agreements.

Advantages of named licenses

Named licenses provide several benefits that make them a compelling choice in specific situations. 

  • Personalization and security: Since the license is linked to a specific user, it can be customized to the individual role and needs within the company. This also adds a layer of security, as only registered users can access the software.
  • Simplicity in management: Managing named licenses is straightforward because each license is associated with a specific user. Tracking who has access to what becomes easier.
  • Compliance: It's easier to ensure compliance with software usage policies and licensing agreements since the allocation is clear and distinct.
  • Price: Compared to concurrent user licenses, named licenses are less expensive.

Disadvantages of named licenses

  • Overlicensing: An organization is required to license anyone who might use the software, so this may lead to having more licenses than actual usage. For example, you may have purchased 100 named user licenses but find that you only use up to 75.
  • Casual users: A casual user, such as a contractor or service provider who requires occasional access to the software, will still need a named license regardless of how many times they log in.
  • Shift workers: If you have staff who access your solution on different shifts, you must license users across all shifts.
  • Administration: Named licenses require reallocation of users as they come and go. Some vendors also place restrictions on how many times a named license can be reallocated.
  • Underlicensing: Most software vendors who license their products by named users don't restrict you from accessing their software without an actual license. However, without carefully monitoring usage, you might have more users using the system than you have licenses for. The vendor will typically perform a "true up" of your licensing to match the number of users who have used the software over the period.

Ideal use cases 

  • Businesses whose employees need guaranteed access to software at all times.
  • Environments in which software usage is heavily integrated into the daily workflows of individual users.
  • Organizations with stable or slowly changing team structures.

What are concurrent user licenses? 

Concurrent user licenses, also known as "floating" user licenses, are shared among a pool of users and offer a more dynamic and flexible model. These licenses limit the number of simultaneous users rather than the total number of users. For example, a company might purchase 10 concurrent licenses that any employee can use, but only 10 people can use the software at the same time.

Advantages of concurrent licenses 

  • Cost effectiveness: This model can be more economical, especially if all users don't need the software at the same time. You pay for peak usage instead of individual access.
  • Flexibility: Concurrent licenses offer flexibility in a dynamic work environment in which different users might need access to the software at different times.
  • Maximized resources: These allow for efficient use of software licenses based on the fluctuating demands of the business.

Disadvantages of concurrent licenses 

  • Understanding the number of concurrent licenses can be a complex task and requires constant monitoring to determine peak concurrent usage.
  • Concurrent licenses typically prevent users from accessing the software once the maximum number of concurrent users has been reached.

Ideal use cases 

  • Companies with employees who use software intermittently or in shifts. 
  • Organizations where software is needed for specific tasks that don’t occur daily. 
  • Work environments with high employee turnover or fluctuating project demands. 
  • Organizations that must expand usage to other areas. 

How to calculate the number of concurrent users 

There's no one-size-fits-all formula for determining the number of concurrent users. It can vary depending on your organization’s usage patterns. Some organizations might fall into a 3:1 ratio — meaning one license for every three users – but you could have higher or lower ratios based on usage patterns and peak activity. It's common to include a buffer as a safeguard in your calculation.

Example license calculation 

Here's an example of calculating across named versus concurrent licenses: 

An organization is licensing a new SaaS IT service management platform. The breakdown of users within the organization is: 

Total people in IT: 1,000.  

Service desk: 25 users across three shifts. 

  • Morning shift: 10 users.  
  • Afternoon shift: 10 users.  
  • Night shift: Five users.  

Change managers: 20. 

Asset managers: Five. 

External consultants: 20. 

HR service management: 10. 

# named required  # concurrent required 
Service desk 25 10 For the service desk, for named licenses we require one license per service desk user across all shifts. However, for concurrent licenses, we only need to purchase for the number of users in an individual shift – in this case 10.
Change managers  20 6 We have assumed for concurrent that only six change managers can be active at any time.
Asset managers  5 2 We have assumed for concurrent that only two asset managers will be active at any time.
External consultants  20 4   As external consultants must have a license, all named licenses are allocated even though they might be intermittent users.
HR service analysts  10 2 HR also wants to use the platform, so assumptions have been made across the number of concurrent users.
80 named  24 concurrent 

These concurrent user licenses are not limited to a specific role and can be used by any users up to a maximum of 24 concurrent users.

It should be noted that an organization can opt for a combination of both named and concurrent licensing.

Identifying the most appropriate model for your organization 

The decision between named and concurrent licenses often comes down to analyzing your organization’s specific needs:

  • Assess usage patterns: Understand how often and predictably your team uses the software. Named licenses are better for constant daily use, while concurrent licenses are ideal for occasional access.
  • Consider budget constraints: If budget is a concern, evaluate the cost implications of each licensing type based on your usage patterns. 
  • Evaluate administrative overhead: Consider the ease of managing each type of license in terms of IT overhead and compliance.

Named and concurrent licensing provide organizations with increased flexibility, and many choose to use both types simultaneously. The decision between named and concurrent licenses hinges on a business's operations and software needs. Careful consideration of these factors allows you to select a licensing model that suits your budget, enhances team productivity, and aligns with your operational workflows. 

Ivanti offers concurrent and name licensing approaches. Find out more about Ivanti’s flexible service management options.