I see licenses clubbed as fixed costs but even with IT systems you can have multiple licenses right? And don't you pay per license in that case (which would make it a variable cost)
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Licensing fixed or variable costs?
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Licensing are almost always fixed costs. Remember, variable costs are costs that increase x $ per unit produced.
Having another employee license in a system does not mean I'm producing one more unit. Think of a license as a salaried employee. Salaried employees are fixed costs, hourly employees are variable. One more license does not result in one more unit produced.
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It can be both. It's not something you can generalise.
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Hello!
It can be both, depends on the context. Do you want to post here the problem so we can help you? Cheers,
Clara
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It can be both. Traditionally licenses were fixed costs, (fixed cost per license and year). But especialyl with SAAS there are all sorts of licensing models that are being charged by the our or use case.
For example: A lot of the tools that we are using in consulting are paid based on the number of client cases they are being deployed on. Think for example team collaboration tools like Trello. Or research reports that are being sold for specific client use. That's classic variable costs.
If in doubt during a case you can always ask (though in most cases licenses would be a miniscule costs compared to others). So unless the client's business model fundamentally depends on this, you should deprioritise it.
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If licenses are granted on a usage or demand basis then its variable otherwise its generally always fixed cost.
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