In an era when business models, technology and workforce structures are changing fast, the question of how we licence enterprise software is becoming just as important as what software we buy. For decades, many companies have bought ERP systems under a seat-based (user-based) licensing model: pay for each named user who logs in. But with AI Agents , remote/hybrid workforces, bots and process automation rising, one must ask: Is the seat-based ERP licensing model still relevant in 2026 — or is it on its way out?
This blog unpacks how traditional ERP licensing is being challenged, explores what’s replacing it, and why flexible, consumption-or outcome-based models (including what we offer at Blue Lotus 360) are emerging as the logical next step.
The Problem with Traditional Seat-Based ERP Licensing
Seat-based licensing made sense when ERPs were confined to offices, desktops and a defined set of users. Every user logged in from a workstation. You counted them, you paid for them. But today’s business reality is quite different.
Here are some of the pitfalls:
Inefficiency and escalating cost
Companies often pay for many more “licensed users” than actually log in every day. Imagine a manufacturing firm: 10 core ERP users, but 50 occasional users (supervisors, temporary staff, remote auditors). The seat model forces you to licence all 60 or find complex workarounds.
Some vendors try to make this easier by offering concurrent licenses instead of strict named seats. On paper, it sounds reasonable: you buy 20 concurrent users and let a pool of 50 people share them, as long as only 20 are logged in at once. In real life, it’s messier – there’s always a “21st user” who gets locked out, IT ends up policing who can log in and when, and most companies eventually over‑buy licences just to stop the system from blocking people during busy periods.
Traditional seat-based ERP doesn’t just waste money, it quietly punishes collaboration. Every time you add someone who could help – a junior accountant, a branch manager, an external auditor, you also add cost. So finance teams start doing the “licence math” in their heads. Junior staff are kept out of the system and pushed back to spreadsheets. Auditors get exported PDFs instead of real‑time access. Department heads wait for someone else to run reports for them.
You’re not really protecting data. You’re slowing down decisions. That’s the hidden problem with per‑user pricing: it creates bottlenecks that look like control.
Mismatch with process-centric workflows
Modern work isn’t purely human-user driven. Think of integration points: IoT sensors feeding data into ERP, APIs, AI Agents and bots that perform data entry, field workers logging via mobile outside traditional desks. Seat-based models don’t account well for non-human or sporadic use, so they start to feel rigid.
AI agents today can read documents, create transactions, kick off workflows, and even chat with your team to sort out issues, without ever logging in like a traditional “user.” If every one of those agents is treated as a full paid seat, it suddenly becomes expensive to experiment or scale automation. A modern licensing model should recognise that AI agents live in the process layer, not the org chart, and price them in a way that encourages you to automate more, not less.
A barrier to digital transformation
If licensing costs scale with headcount, companies hesitate to onboard partners, vendors or remote teams for fear of extra cost. That slows down transformation. According to a 2024 article in Forbes:
“Forward-thinking decision-makers should consider shifting toward performance-based software licensing.” (Forbes)
In other words, paying for seats rather than performance may be sabotaging software potential.
The licensing sea-change is already underway
In a recent blog post about software licensing changes in 2026, one firm points out how major players are revisiting their licensing models:
“When Tesco – one of the UK’s largest retailers – sues a software vendor for £100 million over licensing changes, mid-market IT leaders should pay attention.” (block64.com)
It’s a sign that re-thinking how we pay for enterprise software is not just talk — it’s happening.
The Evolution: From User-Based to Value-Based ERP Licensing
Because of these pressures, we’re already seeing licensing models pivot away from per-seat pricing towards usage, value or outcome-based models. Here’s how the shift is unfolding.
- Usage-based licensing
Rather than number of users, the cost is tied to system usage: transactions processed, API calls, data volume, modules accessed. This model works well when access fluctuates or includes non-human user interactions.
- Module-based and role-based access
Licensing by functional modules (e.g., Finance, Manufacturing, CRM) means you pay for what you use. Role-based access lets more people log in at little extra cost, while only paying extra when they use premium functions or modules.
- Subscription / Cloud models
With cloud ERP becoming the norm, subscription models (monthly/annual) replace perpetual licence plus maintenance. Facilitates scalability and reduces up-front cost.
- Value-based or performance-based licensing
Some vendors are experimenting with tying fees to business outcomes: adoption levels, performance metrics, or business results. The 2026 “Top 10 ERP Systems” report noted:
“Performance-based pricing is on the rise, where vendors tie fees to user adoption, uptime or go-live milestones.” (ERP Software Blog)
That indicates a licensing model centred on business value, not seats.
In simple terms, the healthiest trend is away from counting people and towards scaling by design. Instead of “10 users = this price, 20 users = double”, modern models say:
– Bring as many people into the system as you need to work efficiently.
– Pay for the processing power, modules or outcomes that actually drive your business.
Whether five people log in or five hundred, the goal is that collaboration goes up while your total cost of ownership stays predictable.
Is Seat-Based Licensing Dying? Not Completely — But It’s Changing
It’s important to emphasise: the seat-based model is not dead. For small, static organisations with a fixed set of users and stable workflows, it can still work.
But directionally, the trend is clear: cloud ERP vendors are moving away from rigid seat-based pricing because it doesn’t fit modern ways of working. According to a market report:
“The global ERP software market will reach USD 70 billion by end of 2025… rising towards USD 79 billion in 2026.”
With such growth, licensing models that allow scale without penalising growth will win.
In short, seat-based licensing is evolving rather than disappearing overnight. The default model for new ERP investments in 2026 will likely emphasise value, usage and flexibility, rather than user counts.
The Blue Lotus 360 Approach: Freedom Beyond Seats
At Blue Lotus 360, we believe ERP should be an enabler of growth — not a cost trap based on user log-ins. So we’ve designed our licensing with flexibility, fairness and scalability in mind:
- Unlimited user access across departments, with role-based permissions.
- Transparent subscription pricing — no hidden extras for every new login.
- Modular add-ons — you pay for functionality, not idle seats.
- Cloud-native architecture — remote teams, IoT endpoints and bots count as innovation-fuel, not licensing excuses.
In other words, everyone who needs access, gets access – finance, operations, project teams, partners and field staff, without someone in IT worrying, “Do we have licences for them?”
That makes month-end faster, reporting smoother, and budgeting more predictable, because you’re no longer punished for letting more people collaborate inside the ERP.
We believe “everyone in the business, including partners and field staff, should have access to the right data when they need it” without the fear that the licensing model will penalise growth. At Blue Lotus 360 we see ERP not as a cost per person but as a platform for connected performance.
Why Businesses Are Moving to Flexible ERP Licensing
Companies are choosing the newer licensing models because they deliver real-world advantages:
- Predictable, scalable costs – Instead of paying more each time you hire someone or onboard a partner, you pay based on what you use.
- Inclusive collaboration – More users, vendors and field staff can access the system without extra seats dragging cost.
- Faster ROI – Cloud models plus flexible licensing means quicker deployment, faster business benefit.
- Future-proofing – As you adopt automation, IoT, APIs and mobile, you won’t be penalised for non-human users or fluctuating access.
- Innovation-friendly – When licensing isn’t a barrier, companies are more likely to experiment, adapt and transform.
What Will 2026 and Beyond Look Like — From Licensing’s Point of View
Looking forward to 2026 and beyond, here are three key expectations for ERP licensing:
- Licensing tied to business outcomes
Rather than “10 seats = $X”, we expect more vendors will say “We’ll licence to you based on your throughput, adoption or performance” — e.g., number of processes executed, modules live, automation used.
- Hybrid human + non-human user models
ERP systems won’t just count humans anymore. Your robot process automation (RPA), sensors, mobile workers and external partners will all need access. Licensing models will reflect that by offering “seats + consumption” blends.
- Smarter contract terms around flexibility and upgrade
Contracts will include dynamic clauses: ability to scale up/down, clarity on add-ons, clarity on user-definition, fewer surprises. One recent source on licensing changes in 2026 noted that major vendors are revisiting their licensing frameworks. This means organisations should insist on flexibility and transparency.
As one ERP industry commentator put it:
“The future is not how many people log in, but what they accomplish.”
Conclusion: The Future Is Value-Driven, Not User-Driven
The seat-based ERP licensing model served the industry well in a different era. Today, with cloud, process automation, remote work and dynamic ecosystems, it’s becoming more of a constraint than an enabler.
In 2026 the prevailing model will be about value delivered, processes executed and flexibility enabled — not just the number of users logged in. For companies looking to stay agile and growth-oriented, choosing an ERP partner with a modern licensing mindset is just as important as the technology itself.
At Blue Lotus 360 we’re proud to be at the forefront of this shift. If your current ERP licensing feels restrictive or outdated, maybe it’s time to ask:
“Is my ERP serving my business or limiting it?”
Let’s talk about how you can move to a smarter, more scalable ERP experience without the burden of per-seat pricing.
Book a free consultation with Blue Lotus 360 and explore a licensing model that aligns with your growth ambitions.
