How to lower PLC software costs

PLC vendors make much more profit from software licenses than they do selling hardware. Smart shopping can avoid some of those fees. Advice for lowering PLC licensing fees follows.


Programmable logic controllers (PLCs) and now programmable automation controllers (PACs) are the mainstay of discrete factory automation, and they are increasingly being used in process control. While market research companies predicted the death of PLCs some years ago, claiming that industrial computers would run them out of business, PLCs have continued to dominate automation.

PLC vendors have improved the processors, memory, I/O (input/output), communications, and capabilities of PLCs and PACs over the years to the point where they can compete with distributed control systems (DCSs), motion controllers, CNCs, and specialty controllers, such as robot controls and vision systems. At the same time, the cost of PLCs and PACs has dropped considerably, to the point where a fully functional PLC is available for several hundred dollars.

Figure 1: If PLCs are connected to these HMI terminals, the end user may have to purchase a run-time license for each one, at a cost of about $1,100 per terminal. Courtesy: CimQuest Ingear

Competition among the major PLC vendors also helps to keep the prices down. PLCs get bigger, faster, smarter, and more capable, but hardware prices remain fairly constant.

All this capability has come at a very high price: namely, in the software needed to connect the factory floor to business operations. Understanding how software licenses work can help you understand how you may spend 10 times as much on software as on PLC hardware.

What’s a software license?

A software license governs the use or redistribution of software. A software publisher can charge to buy the software and restrict how many PCs the software can be installed on. For a machine builder who uses a PLC as a control system, it generally means the builder has to pay for another software license every time a new machine gets shipped to the customer (Figure 1).

Software licenses can also restrict users in other ways, such as limiting the number of data points, functions, or workstations able to access data for controlling the machine. The license may also require the purchase of an annual maintenance contract and/or technical support, the purchase of periodic upgrades, and other purchases that can nickel and dime a machine builder or end user for years.

The reasoning is simple: Users of PLC-based equipment are captive customers and have few options but to use the PLC vendor’s software. Software licenses are lucrative for vendors.

Vendors prevent users and machine builders from simply copying the software and loading it onto additional PCs. Any software can be copied, of course, and copies can be loaded into other PCs. But they won’t run on any other PC because of restrictions similar to how Microsoft protects its software from being “pirated.”

Some of these methods include requiring a dongle to be plugged in, or a product activation program. A dongle is a hardware key containing an electronic serial number required to run the software. Product activation requires the user to verify the license, typically by entering a product key or serial number to activate and use the software.

Cost of software licenses

How much do these licenses cost? That’s hard to say and almost impossible to find out. And there’s no “typical” cost because needs vary greatly between user and industry. The cost is often driven by the number of data points, software features, and user-level discounts. For this reason—including competitive advantage—open price lists are not readily available, especially for PLC software.

On the other hand, it is possible to find almost anything on the Internet. A little hunting found these (vendor omitted):

  • Redundancy module for $18,400: This links two systems to create a fault-tolerant redundant pair.
  • HMI/SCADA module for $6,975 creates HMI/SCADA clients. (HMI is human machine interface software. SCADA stands for supervisory control and data acquisition.)
  • SQL data logging module for $950 provides basic SQL (structured query language) data logging.
  • Reporting module for $2,200 creates dynamic, database-driven Adobe PDF reports. 

It is difficult to know if these prices are high, low, or typical, because there is little to compare them to.

Cost depends on pricing from the software publisher, number of development licenses, number of data points, add-on components, number of run-time licenses, annual maintenance fees, and other factors. These particular citations did not indicate whether the price was for shrink-wrapped software costs alone or if any services fees were included.

What software do you need?

A typical PLC application usually requires purchase of:

  • PLC programming software (Figure 2)
  • HMI development software
  • SQL / database license
  • Data I/O server
  • Add-on tools and components
  • HMI run-time license 

Each, of course, has a separate software license. The software developer still needs to add his skills, experience, and creativity to produce the end product ready for run-time deployment.

Figure 2: Buying PLC programming software is just the first purchase in a long list of expensive software programs needed to get an automation system up and running. Courtesy: CimQuest Ingear

Run-time license fee is another revenue generator for the software publisher. A run-time license is a way for software publishers to control distribution and generate another revenue stream.

Basically the software publisher charges a fee for tools to create applications, places restrictions on the types of applications you may create, and then charges fees for distributing your works. This is akin to buying an e-mail program and paying a royalty for each e-mail you send.

See more next page, about decreasing software costs.

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ESMOND , Non-US/Not Applicable, Singapore, 04/09/13 07:49 PM:

The article comments are right but always we have forget about the maintainable and upgrading... Sometime is the pain in rewrite the application because of the computer OS that not supporting the driver...I think while we are considering on saving cost, we shall also have to discuss on the best way of maintenance the application.
LUIS , Non-US/Not Applicable, Colombia, 04/11/13 08:40 AM:

is a superficial view in regarding with the software, thera is a lot for to talk about the aoftware, main characterist, functions, betwen others
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