What payment structure does a term license typically follow?

A term license typically follows a payment structure that involves an annual upfront payment. This method means that organizations commit to a certain period, usually one year, and pay for the entire term upfront, rather than in smaller monthly or quarterly increments. This upfront payment approach allows for budgeting predictability and often provides the organization access to the software or service for the entire term without any additional fees besides potential support or maintenance updates that may be necessary.

The reason for the focus on a single upfront payment is to simplify financial planning for businesses and often comes with incentives or discounts compared to the monthly or quarterly payment methods. It is structured to support the customer's long-term commitment to using the product or service over the set term.