Types of Odoo Licenses and Mistakes to Avoid While Buying

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Odoo, one of the leading ERP solutions, offers two editions: Enterprise (License) and Community (a free, open-source version). While the Community Edition requires no licensing fees, the Enterprise Edition comes with three deployment options: Online, .sh, and On-Premise.

Among these, Odoo Online is the most cost-effective, making it an attractive choice for many businesses. However, selecting the right version isn’t just about cost—it depends on several key factors, including the level of customization needed, development flexibility, number of users, and server management requirements. Choosing the wrong version without considering these aspects can lead to limitations in functionality and scalability.

Odoo offers two main editions, each catering to different business needs:

Community Edition – A free, open-source version with essential features, ideal for startups and small businesses with minimal ERP requirements. It lacks official support and some advanced functionalities.
Enterprise Edition – A paid version that includes all the features of the Community edition plus additional premium modules, official support, cloud hosting options, and advanced capabilities tailored for growing businesses.

Odoo Enterprise Hosting Options

The Enterprise edition is further categorized based on hosting and deployment:

Odoo Online (SaaS) – A fully managed, cloud-based solution hosted by Odoo. Businesses don’t have to worry about maintenance, security, or infrastructure management. It’s ideal for companies that require a simple ERP setup without customizations.
sh (PaaS) – A hybrid platform-as-a-service (PaaS) option offering more control, allowing businesses to customize modules, integrate third-party applications, and access staging and development environments.
On-Premise (Self-Hosted) – Businesses can install and host Odoo on their own servers or use third-party cloud providers like AWS (Amazon EC2) or DigitalOcean. This option is suitable for organizations requiring full control and extensive customizations but comes with additional management costs.

Cost Breakdown of Odoo Licenses

1. Odoo Online (SaaS)

User licensing costs start at $37.40 per user per month (as of 2025). (country specific cost may vary)
Hosting, maintenance, and security updates are included in the subscription fee.
Ideal for businesses that do not require extensive customizations.

2. Odoo.sh (PaaS)

Additional hosting fees apply depending on server resources, the number of users, and storage requirements.
Includes a development environment, access to source code, and third-party app installations.
Requires technical expertise for deployment and maintenance.

3. On-Premise Implementation

No direct Odoo hosting fees, but businesses must purchase servers or use cloud services.
Requires additional investment in IT infrastructure, security, and maintenance.
Full control over data, but with added complexity.

Comparing Hosting Options: Online vs. .sh vs. On-Premise

Odoo Online (SaaS):

Pros:
- No need for server maintenance or infrastructure management.
- Lower upfront costs.
- Automatic updates and security patches handled by Odoo.
Cons:
- Limited customization options.
- No access to third-party modules.
- Data is stored on Odoo’s cloud servers, reducing control.

Odoo.sh (PaaS):

Pros:
- Allows for advanced customizations and third-party integrations.
- Provides staging and development environments for testing.
- Managed by Odoo, ensuring compatibility and support.
Cons:
- Higher costs compared to Odoo Online.
- Requires technical expertise for setup and maintenance.

On-Premise:

Pros:
- Complete control over the environment and data.
- Unlimited customization and module integrations.
- Can be hosted on any server or cloud provider.
Cons:
- High initial setup and maintenance costs.
- Requires dedicated IT personnel for server management.
- Ongoing security, backup, and update responsibilities.

Why Odoo.sh is Costlier Compared to Online?

Odoo.sh provides greater flexibility but comes at a higher cost due to:

Resource Allocation: Businesses can scale up resources as needed, leading to variable pricing based on usage.
Development and Staging Environments:sh includes features like testing environments, version control, and debugging tools, making it ideal for businesses requiring ongoing development.
Third-Party Integrations: Unlike Online, which restricts external integrations, SH allows for custom modules and API connections.

Odoo Online, being a standardized and limited cloud service, is more affordable but lacks the flexibility needed for complex implementations.

Hidden Costs in On-Premise Implementation

Opting for On-Premise means businesses will incur several additional costs:

Server Costs: Purchasing physical servers or renting cloud servers from providers like AWS (EC2) or DigitalOcean.
IT Maintenance: Hiring technical personnel to manage server infrastructure, security patches, and system updates.
Backup and Disaster Recovery: Implementing backup solutions to prevent data loss.
Security Management: Ensuring compliance with security best practices, firewall management, and data encryption.

Current Pricing for Amazon EC2 and DigitalOcean (As of February 2025)

Amazon EC2:

micro Instance:
- vCPU: 1
- Memory: 1 GiB
- Storage: Not included (EBS purchase required)
- Bandwidth: Pay-as-you-go
- Price: $8.47/month (excluding storage and bandwidth costs)

DigitalOcean:

Basic Droplet:
- vCPU: 1
- Memory: 1 GiB
- Storage: 25 GiB SSD included
- Bandwidth: 1TB included
- Price: $6/month

Limitations of Studio Module

Limited Customization Scope: Cannot modify core functionality or add complex workflows.
No Access to Third-Party Modules: Businesses relying on third-party integrations must choose .SH or On-Premise.
Restricted Automation Features: Limited capability for advanced automation and custom scripting.
No Access to Odoo’s Backend Code: Only available in Odoo.sh and On-Premise deployments.

Which Odoo License Should You Choose?

For startups or small businesses: Odoo Online is the most cost-effective and hassle-free choice.
For businesses needing moderate customization:sh provides the right balance between flexibility and ease of use.
For enterprises requiring complete control: On-Premise is the best option, but comes with significant management costs.

By understanding these licensing options and potential pitfalls, businesses can make informed decisions when selecting the best Odoo deployment strategy.

Mistakes to Aviod while Buying Odoo License

Understand the Difference Between Editions
- Community is free but has limited features.
- Enterprise includes advanced features and support but requires a license.
If Custom Development Is Needed, Choose Odoo.sh
- Odoo.sh allows custom modules and third-party apps.
- Best suited for businesses requiring flexibility and modifications.
If You Have Your Own Servers, Choose Odoo On-Premises
- Gives full control over data and security.
- Requires in-house IT expertise for setup and maintenance.
Don’t Just Pick the Cheapest Option
- A lower-cost plan might not support your future customization needs.
- Consider long-term scalability before making a decision.
Online version Has Limitations on Customization
- Ideal for small businesses that don’t need customization.
- If you require flexibility, Odoo.sh or On-Premise is better.
Consider User-Based Pricing
- Enterprise pricing is per user, so optimize the number of licenses.
- Assign roles carefully to minimize unnecessary costs.
Evaluate Future Growth Needs
- Choose a plan that accommodates business expansion.
- Avoid outgrowing a limited plan too soon.
Check Support & Maintenance Requirements
- Odoo Enterprise includes official support; Community does not.
- If you need long-term assistance, Enterprise may be better.
Negotiate with an Odoo Partner for Better Pricing
- Partners may offer better deals on licensing and implementation.
- Get expert guidance on the best edition for your needs.
Check Compliance and Security Requirements

On-premise offers full data control for regulated industries.
Odoo.sh and Online are managed by Odoo but may have data storage restrictions.

About Globalteckz

Globalteckz is a leading Odoo ERP implementation partner, providing customized business solutions globally. With expertise in Odoo, ERPnext, Magento, and eCommerce development, we serve clients in India, the USA, Canada, the UK, UAE, and beyond. Our solutions streamline operations, enhance productivity, and drive digital transformation for businesses of all sizes. If you need free consultation before buying licenses – Feel free to email us on sales@globalteckz.com

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