Consumption-based licensing is a type of software licensing, where the software vendor enforces a licensing model that enables them to charge users based on their usage of the application that the vendor sells.
This “usage” (or consumption) can be, for example, use-time, the number of times an item is accessed, or the number of times a particular action is completed or a feature used, like exporting a file.
Implementing consumption-based licensing allows a software business to deploy a pay-per-use business model for its end customers.
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