What’s the Difference Between Concurrent User vs. Named User Licenses?

What's the difference between named vs. concurrent user licenses? Here’s what you need to know.

If you are in the market for a cloud ERP solution or considering a cloud migration from your on-premises solutions (such as Dynamics NAV or GP), you probably noticed that software vendors offer two types of licensing: named (pay-per-license) and concurrent (pay-per-use) licenses. To understand the licensing model, let’s dive into the differences between concurrent user licenses and named user licenses to help you assess which type works best for your requirements.

In this article, we’ll discuss:

• What is a concurrent user license?

• What is a named user license?

• What is the difference between named and concurrent user license?

What is a Concurrent User License?

A concurrent user license is like a group license. It allows a team of employees to share a license between them. Each user is entitled to access and use the software, but only up to the specified maximum number of permitted users.

This means that if you have a 5 concurrent user license plan, up to 5 registered people can simultaneously access the software, regardless of who they are. However, if an additional user wants to log on, they won’t be able to access the system until one of the 5 using the software log off and a license becomes available.

With this type of licensing, it is common that more users are registered than actual concurrent licenses available. This model is often found in companies where employees work in different shifts or time zones and access the software at different times.

What is a Named User License?

A named user license is a single license and is individualized. The license, in this case, is made for a specific group of people, and only they can access and use the software. This means if you have a 5 named user license plan, only the 5 registered people selected to use the software will be able to access the software.

This type of licensing is ideal when you have a situation where a specific group of people needs constant and unlimited access to the software. This type of licensing is more common in cloud-based ERP solutions.

Many software providers using this model also offer add-on additional users who need access to the software from time to time. They may need to consume data or reports, complete light tasks like time or expense entry and HR record updates, or use the system more heavily without requiring full user capabilities. For example, Microsoft’s cloud-based Dynamics 365 Business Central follows a named user licensing model and allows you to get additional licenses for these types of users.

What is the Difference Between Named User Licenses and Concurrent User Licenses?

The main difference between a named user license vs concurrent user license lies in how the license is assigned and used. Named users licenses are identity-based and only allow the assigned user to access the software, while concurrent user licenses are based on how many people are accessing the software simultaneously, regardless of their identity.   

Here’s a brief summary of differences between named user vs concurrent user licenses.

	Named User	Concurrent User
Usage	Usage is identity based. Only specific individuals with their dedicated license can access the software, regardless of whether they’re logged off or not.	Simultaneous access for a set number of users, limited only by the number of licenses and not by who is using them.
Pricing	In this model, you’re paying for dedicated access for each user, regardless of how much or little they use their license.	In this model, you’re paying for the maximum number of people using the software at any given time, regardless of identity.
Benefits	Named user licenses are predictable, offer clear accountability and there is no confusion around how many users can access the software at any given time.	By pooling licenses, you’re reducing overall costs. It also offers the flexibility to scale up and down easily, as you can adjust the number of concurrent licenses you require without overhauling your licensing structure.
Ideal For	Companies with teams who consistent teams or teams where employee access needs don’t change frequently.	Companies with teams who have fluctuating work hours or shifts and don’t need access to the software at the same time or businesses who have high turnover rates.

About Kwixand Solutions

As a Microsoft Dynamics 365 Partner based in Vancouver, Canada, we think about digital transformation a bit differently. For us, successful digital transformation is much more than just implementing an ERP or CRM solution. It's about helping businesses achieve their goals and maximizing their ROI, and ensuring they are set up for continued success. Get in touch today to learn how we can help your organization digitally transform.