Companies use many kinds of software: document tools like Excel, Word, and PowerPoint; business process software such as CRM, ERP, and groupware; and specialized tools like AutoCAD, IntelliJ, and Figma that boost the productivity of architects, developers, designers, and other specific roles. Each type of software has its own characteristics, and the ways it is used and licensed have evolved in increasingly complex ways. In this post, we look at the history of enterprise software and how licensing policies have changed over time.
Enterprise software began with the arrival of mainframe computers in the 1960s. Companies like IBM bundled software together with their hardware. Software of this era was written in early programming languages such as COBOL and was developed mainly for tasks like accounting and data management.
In the late 1970s, MRP (Material Requirements Planning), which emerged mainly in manufacturing, evolved into ERP (Enterprise Resource Planning), a tool for managing business operations in an integrated way. Companies like SAP and Oracle began to lead the ERP market, and from this point on, software became a core operational tool for businesses.
The 1990s, when PCs and the internet spread widely, marked a turning point for enterprise software. Microsoft Office came to dominate the desktop software market and became the standard tool for writing documents, managing data, and building presentations. At the same time, advances in networking made the client-server architecture widespread, enabling data sharing and collaboration.
In the 2000s, cloud computing dramatically changed how software was built and used. The rise of cloud platforms like Amazon Web Services (AWS) opened the door to the SaaS (Software as a Service) model, in which software is delivered as a service. Salesforce led the SaaS market with its cloud-based CRM, and companies could now use software flexibly through the cloud without large upfront investments.
In the 2010s, big data and AI technologies merged with enterprise software and opened up new possibilities. RPA (Robotic Process Automation) automates repetitive tasks, while BI (Business Intelligence) tools analyze and visualize data to support decision-making. Advances in cloud and mobile technology have also made it possible to access software anytime, anywhere.
Changes in how software is used have had a major impact on licensing policies. The shift from simple early license models to today's complex and flexible models was driven by technological progress and changing business needs.
Early software followed a perpetual license model. Companies bought software once and could use it indefinitely. However, updates and maintenance services came at an additional cost.
User-based licensing was introduced in the late 1980s. This model prices licenses by the number of people who use the software, encouraging companies to buy only as many licenses as they need. Microsoft Office licensing is the best-known example, and Hancom's Hangul, Korea's widely used word processor, follows the same approach.
With the spread of cloud and SaaS in the 2000s, subscription licensing became mainstream. Companies could use software by paying a regular subscription fee without an upfront investment, while receiving the latest updates and technical support. The advantages of subscription licensing are a flexible cost structure and ongoing access to the latest version. But as the number of subscription software products grows, it also brings challenges around cost control and duplicate spending.
Customized license models have also emerged for large enterprises and customers with special requirements. Licenses designed flexibly around specific projects or time periods reflect customer needs and strengthen collaboration between companies and vendors.
Large enterprises often deploy business software on-premises because of their security policies. In the past, vendors offered these deployments under site licenses or perpetual licenses. Today, a growing number of vendors offer on-premises installations under subscription licenses billed annually.
This can be seen as vendors responding to the diverse IT needs of their customers through customized licensing policies.
The variety of license models has made corporate IT environments far more complex. Effective license management delivers the following benefits:
Enterprise software keeps evolving as technology advances and business needs change. Licensing policies have also become more diverse and granular to keep pace. As a result, companies now hold a wide mix of licenses, from legacy license types to the many policies vendors offer today.
However, there is no suitable solution, in Korea or abroad, for managing all of these licenses in one place. SELLEASE is building a system to manage software licenses in a unified way.
