> For the complete documentation index, see [llms.txt](https://docs.nalpeiron.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.nalpeiron.com/education-and-training/licensing-education/learn-about-software-licensing-models/consumption-based-licensing.md).

# Consumption-Based Licensing

Consumption-Based Licensing tracks and charges for actual software usage using units called consumption tokens, enabling flexible and fair pricing.

**Key Features:**

* Allocates tokens to license codes or users for purchasing software or features.
* Supports usage-tracked contracts and pay-as-you-go models.

**Benefits:**

* Aligns costs with value derived.
* Opens up new markets by making software accessible to light users.

**Trends:**

* Popular in SaaS and cloud services.
* AI/ML for usage predictions and dynamic pricing.
* Granular tracking, down to API calls or processing time.

Consumption-Based Licensing is ideal for organizations optimizing costs based on usage or offering flexible pricing to customers.


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