Navigating Application Delivery Licensing Models in the Cloud Transition

As organizations transition to the cloud, one critical aspect to consider is the licensing model for secure application delivery. These models play a pivotal role in addressing the needs of both enterprises and cloud service providers. Let us delve into the intricacies of application delivery licensing and explore the various options available.

Traditional Models: Perpetual Pricing and Subscription Licensing

1. Perpetual Pricing per Instance

Traditionally, load balancers, as application delivery controllers were called earlier, were physical devices deployed as redundant pairs. Under perpetual pricing, organizations obtain a non-expiring license to use an instance, whether it is hardware-based, virtualized, or in the cloud. Notably, customers are not obligated to pay for support or updates, although these services are available at an additional yearly cost.

2. Subscription Licensing Model

With the rise of virtualization in data centers (software-defined data centers), ADCs transitioned to virtual appliances. Subscription licensing emerged as a flexible option. Here is how it works:

  • Organizations acquire a renewable license (usually annual or monthly).
  • The subscription includes software support and updates throughout the subscription term.
  • At the end of the term, the license automatically terminates unless renewed.

Cloud-Ready ADCs: Consumption-Based Pricing

As applications migrate to the cloud, ADCs are now offered as cloud services. Consumption-based pricing has gained prominence. Here is what you need to know:

Utility-Pricing Model: ADCs are billed based on usage metrics such as connections, bandwidth, and CPU cores.

Per-Hour Billing: Organizations pay for ADC capacity on an hourly basis, aligning costs with actual usage.

Dynamic Performance Profiles: In a cloud environment, ADC instances may need to adapt to traffic spikes. The licensing infrastructure and automation must accommodate these fluctuations seamlessly.

The Problem of Plenty: Evaluating Choices

Choosing the right licensing model can be overwhelming due to the abundance of options. Consider the following:

Perpetual Licensing: Ideal for stability and long-term planning.

Subscription Licensing: Offers flexibility and regular updates.

Consumption-Based Licensing: Aligns costs with usage but requires dynamic management. This option may not be the best if you have a fairly static workload.

For service providers that are managed/cloud service providers (MSP/CSP) with regional presence and smaller footprint, rapid growth and expansion of Amazon AWS, Microsoft Azure, and Google Cloud Platform into their markets may be a threat. To survive this competitive landscape, and differentiate, MSPs (Managed Service Providers) must also consider:

  • Cost predictability of licensing models for their infrastructure as well as their tenants.
  • Procurement and simplicity of splitting a license for service provider across multiple tenants.
  • License option that spans both private and public cloud infrastructure and includes hardware because tenants may have hybrid and multi-cloud requirements.


In the cloud era, understanding ADC licensing models empowers organizations to optimize costs, enhance performance, and seamlessly scale their applications. Choose wisely and let your ADC journey to the cloud be both efficient and cost-effective!

Delve into the licensing challenges associated with application delivery and explore strategies for a streamlined and cost-effective transition to your preferred execution environment. The webinar explores the intricacies of metered, subscription, and perpetual licensing models and provides a glimpse into how Verizon applies effective licensing practices to optimize application delivery.

Prakash Sinha

Prakash Sinha is a technology executive and evangelist for Radware and brings over 29 years of experience in strategy, product management, product marketing and engineering. Prakash has been a part of executive teams of four software and network infrastructure startups, all of which were acquired. Before Radware, Prakash led product management for Citrix NetScaler and was instrumental in introducing multi-tenant and virtualized NetScaler product lines to market. Prior to Citrix, Prakash held leadership positions in architecture, engineering, and product management at leading technology companies such as Cisco, Informatica, and Tandem Computers. Prakash holds a Bachelor in Electrical Engineering from BIT, Mesra and an MBA from Haas School of Business at UC Berkeley.

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