Save Money on Your Software

A box containing 200 mailing envelopes should cost twice as much as a box containing 100 envelopes. Yet your office supply store charges only 50 percent more.

The reason: You're getting a "volume discount." A volume discount is a common seller's practise of charging less per item as you increase the number of items you buy.

Leading software makers follow this marketplace custom, too. Unfortunately, small businesses operators often miss out. When it's time to add new software or upgrade existing programs, they simply visit a computer store and pay retail prices. Or, if they know about volume discounts, they believe they have to buy dozens of software programs to qualify.

Adding to the confusion is the vocabulary that surrounds software buying. So perhaps the best place to start the discussion about saving money on software is with the term "license."

What's a Volume License?
When it comes to selling and buying software, software makers talk about licenses. That's because when you buy a software product you do not actually own it. Instead, the software maker sells you a license to use it. This license also stipulates what you can do with it —such as install and use it on your computer—and what you cannot do with it—such as also install it on your cousin's computer or make copies and sell it on the Internet.

When you're interested in buying more than a few copies of a software title, software makers will sell you a "volume license." A volume license lets you legally install a software program on multiple computers—and at a price often much less than buying a separate software CD to use for each PC.

A volume license specifies how many computers you can install the software on or, in the case of server software, how many users (or "seats") can access the software on a network. Volume licensing agreements can call for the installation of monitoring components along with the software so that the software maker can tell how many times the software has been installed or how many employees are using the application over a network at any time.

What's the exact number of computers or users required to qualify for a volume license? It varies by software title and manufacturer, but initial discounts start at levels less than you might think.

For example, Microsoft has a licensing program for small businesses that allows you to qualify for volume discounts when purchasing as few as five licenses. In fact, the purchase of one copy of Windows Server 2003 or Windows Small Business Server 2003 qualifies you for volume discounts because each automatically includes five client access licenses.

Volume Licensing Benefits
A volume license contract—which can typically run two or three years—can also bestow the right to purchase additional licenses at the same initially discounted price. Also worth noting is that some manufacturers enable you to qualify for their volume discounts by buying a mix of their software titles instead of having to buy multiple licenses for one product.

Volume licensing deals may have other attractive features that apply over the license contract period. For example, you can get:

You don't buy a volume license at a retail store selling software. Software companies will either sell licenses directly to you or make volume discounts available through their authorised partners or resellers. Visit a software company's Web site to find out how it handles volume license sales.

Another Option: Pre-installed Software
Maybe you are not ready to take advantage of volume licensing, but are ready to replace or add a PC to your workplace. If so, another excellent opportunity exists to save on software costs. Buy your new computer with the software pre-installed on the machine. Most leading computer manufacturers will package major software products with their PCs at far less cost than if you bought the product at a retail store.

One drawback to the licenses from equipment manufacturers is that—unlike boxed software from a retailer—you cannot uninstall it from the manufacturer's PC and install it on another PC. All you can do with the software is re-install it on the computer you purchased. Also, pre-installed software does not include free upgrades or technical support from the software maker. You may be able to purchase technical support from the computer maker, however.

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