The best representation of this type of license is a service such as mobile phones. For years now consumers have paid for usage when it comes to mobile phone services. Starting with voice, you pay so much per month for each voice "minute" used. The currency can be different but typically the unit of measure is the same... minutes per currency. You don't own the network and you don't own the software that enables the voice traffic to traverse the many repeaters, routers and uplinks, but you still get the service... every month with a similar Service Level Agreement. This is a pay-as-you-go or pay-as-you-consume minutes model. This is a basic definition of Consumption Based Licensing.

The next phase of licensing in the mobile phone market was to set a "term" for usage. The phone company asked the consumer to pay a set amount based on a number of used minutes in a fixed number of months (usually a 12 or 24 month "term"). So the contract was a certain currency per month for a maximum number of voice minutes over a 12 or 24 month term. If the consumer used more than the allocated minutes, the usage reverted back to a pay-as-you-go model. Certainly the currency for usage for this "overage" was a premium because the usage was not a part of the "Term" contract.

To learn more and to read the entire article at its source, please refer to the following page, What is Consumption Based Licensing?- The Citrix Blogs