# COST05-BP04 - Select software with cost-effective licensing

Best practice: COST05-BP04
Pillar: Cost Optimization
Source: https://wellarchitected.cloudvisor.eu/docs/cost-optimization/cost05-bp04.html

## Implementation guidance

When selecting software for your workload, evaluate the licensing model as a
first-class cost factor. Licensing terms — per-core, per-user, subscription,
bring-your-own-license (BYOL), or open source — can dominate the total cost of a
component, and the most cost-effective choice depends on how you deploy and
scale on AWS.

### Evaluate licensing options

**Compare licensing models**: For each software component, compare the available
licensing models (commercial license-included, BYOL, subscription, and
open-source alternatives) against your expected deployment size and usage
pattern.

**Account for AWS-specific pricing**: Consider license-included AWS offerings
(for example, license-included Amazon RDS or Amazon EC2 instances) versus BYOL,
and factor in how each scales as instance count or capacity changes.

**Consider open-source and managed alternatives**: Where a commercial product
carries heavy licensing cost, evaluate open-source or AWS-managed equivalents
that may deliver the required capability at lower total cost.

### Manage licenses cost-effectively

**Track and optimize entitlements**: Use AWS License Manager to track licenses,
enforce limits, and avoid over- or under-provisioning of paid licenses.

**Right-size to the license**: Align instance type and count with license terms
(for example, core-based licensing) so you are not paying for licensed capacity
you do not use.

**Re-evaluate over time**: Revisit licensing decisions as usage, pricing, and
available alternatives change.

## AWS Services to Consider

<div class="aws-service">
  <div class="aws-service-content">
    <h4>AWS License Manager</h4>
    <p>Track, manage, and enforce software licenses to avoid over-provisioning and non-compliance costs.</p>
  </div>
</div>

<div class="aws-service">
  <div class="aws-service-content">
    <h4>License-included AWS services</h4>
    <p>Compare license-included offerings (e.g. Amazon RDS, EC2) against bring-your-own-license for the most cost-effective model.</p>
  </div>
</div>

<div class="aws-service">
  <div class="aws-service-content">
    <h4>AWS Marketplace</h4>
    <p>Evaluate flexible, usage-based, and subscription licensing for third-party software.</p>
  </div>
</div>

## Related Resources

<div class="related-resources">
  <ul>
    <li><a href="https://docs.aws.amazon.com/wellarchitected/latest/framework/cost_select_service_select_for_license.html">AWS Well-Architected — COST05-BP04 Select software with cost-effective licensing</a></li>
    <li><a href="https://docs.aws.amazon.com/wellarchitected/latest/framework/cost-05.html">COST05: How do you evaluate cost when you select services?</a></li>
  </ul>
</div>