What Is Volume Licensing?

Volume licensing is the licensing or activation of software across a large number of computers. These machines are most likely in the same domain or physical location. It is most commonly encountered when software is used in business, education or government, and it proves useful whenever there is a need for many software licenses.

Volume licensing is offered by software programmers and utilized by their customers for a variety of reasons. First, it is typically not restricted to specific types of software. Instead, it serves to provide licenses to many different kinds of software, including content creation programs, software that helps computers to be more secure, server-side programs, and operating systems.

Second, the time needed to enter, activate and track separate license keys for multiple computers can be considerable. To avoid the issues associated with multiple license numbers, a single volume-licensing serial number is used instead. This, in turn, saves both the software maker and the customer time and money. The need for multiple physical copies of the same software and their accompanying license keys is eliminated.

Third, this elimination of physical copies brings with it the most important reason for volume licensing to be employed. The cut in costs associated with the lack of physical product, individual software serial numbers and manuals usually — but not always — enables a business to obtain each license of the software for less money than would be needed to buy separate software product keys. The lower prices offered through volume licensing also allows software manufacturers to better compete for business. The price per software seat generally decreases as the number of licenses is increased.

A volume-licensing key typically works by setting a limit on the number of licenses that can be activated using that key. This can be done through license pooling, whereby a license file on the network controls the usage of licenses. Another possible volume-licensing setup involves the software contacting a remote licensing server, which can be onsite or hosted by the software vendor. This server tracks the number of licenses associated with a particular key and can be set to refuse additional license requests once the number of licenses on the volume-license key is reached.

One disadvantage of volume licensing comes when unauthorized use of the volume-licensing key occurs. This can result in many computers having unlawful access to software licenses. Should a volume-licensing key be used outside the organization for which it was originally intended, the licensee might be held liable for software piracy. For these reasons, an organization usually carefully guards and monitors the use of its volume-license keys.