What is a software “license?
A software license is the legal term for the right to possess a product. Some software companies’ End User License Agreements (EULAs) state that their product is not owned, but licensed. This merely means that the software company retains the right to control the usage of its intellectual property and you are subject to the terms of the EULA. For COSL purposes, a “license” represents one installation of a product.
A software license grants a person (or company) the legal right to use a software program. For each software program you use, you need a license granted to it and proper documentation evidencing that license. Microsoft offers many licensing programs designed to meet your every need. The software licenses that accompany these programs will vary.
A software license is an agreement that gives you the right to use the software. You are not buying the software program itself and you do not own it. The benefit of a license is that it makes your rights and your software suppliers rights clear to both parties. However, it also imposes obligations on both parties.
Probably the most important (and perhaps most misunderstood) difference between computer software and other assets that your company may have purchased is that you don’t own the software. What you have purchased is a license to use the software. When you purchase software, whether it is in a box in the store, with a computer that you purchased, or downloaded of the Internet, what you really are paying for is a software license which gives you, the user, the legal right to use that particular software application. It is very important that you file both the software license and the proof of purchase a secure place. Furthermore, since software licenses can vary widely, not only across software vendors, but often even across the same software application, you also need to read, understand the terms of each and every software license purchased. …
