Software licensing is crucial for managing and complying with terms set by software manufacturers. A licence governs the right to use software, separated from ownership, and can be perpetual, temporary, or subscription-based. Key factors include:

1. Licence Types: Per copy, server-based, concurrent usage, or client access.
2. Proof of Licence: Required documentation includes certificates of authenticity, volume agreements, and contracts.
3. Upgrades and Compliance: Managing upgrades and ensuring correct usage is vital to avoid financial loss or non-compliance.
4. Managing Risks: Protect against counterfeit products and unclear licensing terms.

Types of Software Licences:

1. Perpetual Licences: Permanent, purchased once.
2. Subscription/Rental Licences: Temporary, for a defined period, involving renewal.
3. Concurrent Usage: Allowing several users to access software simultaneously.
4. Server/Processor Licences: Based on server capacity.
5. Client Access Licences (CALs): Rights for clients to access server software.

Upgrades: Different licences offer varying types of upgrades. Ensure eligibility for:

• Version upgrades (later releases of the same product).
• Product upgrades (more comprehensive suites).
• Competitive upgrades (based on competitor software).

Compliance Risks:

1. Counterfeit Software: Avoid purchasing counterfeit licences through unauthorised resellers.
2. Licence Documentation: Store Certificates of Authenticity (COAs) and purchase agreements safely.
3. Lost Licences: Prevent financial loss by securing and properly managing licence documents.

Licence Management Best Practices:

• Software Asset Management (SAM) ensures correct compliance with terms.
• Centralised Management helps track and protect licence information.
• Use electronic systems like Document Management to store scanned copies of licences and proofs for easy retrieval and auditing.

Adopting the right practices ensures cost savings, better compliance, and risk reduction in managing software licences.