Consumption-based Licensing | Definition

Consumption-based licensing, also known as usage-based licensing, is a type of software licensing.

In consumption-based licensing 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.