Definition
Subscription (term licence)
A licence that grants access to software only for as long as you keep paying, billed on a recurring monthly or annual term.
Also known as: Term licence, Term license
A subscription, or term licence, grants the right to use software only while you keep paying, on a recurring monthly or annual basis. It is the dominant model for modern SaaS, and it contrasts with a perpetual licence, which is bought once and owned outright.
Every subscription has a renewal date and, usually, a notice period, which is what makes ongoing tracking necessary rather than a one-time purchase decision. Subscriptions are frequently sold on an annual term billed monthly, so leaving one part way through can still mean paying out the rest of the committed year.
Related terms
- Multi-year contractA software agreement that commits you for longer than a year, usually in exchange for a lower price than an equivalent annual deal would carry.
- Co-terminationAligning several contracts with the same vendor onto one shared end date, so they renew together and are negotiated once rather than piecemeal through the year.
- Perpetual licenceA licence bought once that lets you use a specific software version indefinitely, often with a separate optional support fee.