EPOS software licenses - the facts

All EPOS software houses who sell EPOS software to small retailers will make you sign up to a software license agreement. This is your contract to use the software - and these licenses vary considerably.

Broadly there are two types of license agreements for EPOS software. A so called "shrink wrap" license essentially means you are buying the software outright. A bit like buying a computer game. It gives you the right to install and use the software for ever without any time constraints.

The other type is the annual license. This means that you pay a fee each year for the right to use the software. Although an annual license sounds bad and an additional expense, in the long run it is better. Software houses need regular reliable income, and most of them use an annual license to generate this. What you are paying is funding for the software house to continue maintaining and developing the software.

Most annual licenses will contain some provision for upgrades to the software. Very often, the software upgrade itself is free for a certain number of upgrades. However, be warned, the time to actually install the software update may well be chargeable.

What happens if the software house goes bust? Well, in this case it is important to have agreements in place (e.g. Escrow) which protects your investment if this happens. An escrow for the source code of EPOS software is pretty useless - the code itself is only useful for the developers who have been trained on it - however, an agreement to pay the administrators for a "lifetime" license in the event of the software house going bust is a useful protection.

Another consideration is support. Some licenses include software support, other EPOS system suppliers will make you pay an annual fee for software support. Please remember that support is not training. Training is usually paid for separately. What is the differnce between training and support for EPOS software? Well, if your question starts with "how do I?" then it is training! If the issue is that "there is an error message" then that may well be support!

Most software resellers will change per user of the EPOS system. Adding an extra user means more money. Also, a lot of EPOS software suppliers will also charge a "site" license for each additional site you add. If you have a large number of users or sites, then this cost will become the major element of the investment, so make sure you are aware of these costs.

When buying EPOS software, make sure you have a good understanding of the impact of the terms of the EPOS software house license agreement. If you are buying the software outright, make sure you ask about the costs of upgrades and maintained. What happens if the VAT rules change? If you are buying an annual license, make sure you protect yourself in the event of the company going bust.