The licensing concept in TM1 is very simple. You need user licenses for each user. For the user licenses you have an administrator level (Modeler, at least one), a writeback and execute level (Contributor) and a read and consultation level (Explorer). The below discusses this synopsis in more detail. If you need a PVU based server license, you can find the details next to autorized user licencing.
AUTHORİZED USER LICENSES
A TM1 Modeler is the equivalent of an administrator. A Modeler can do everything, it’s that simple. You always need at least one TM1 Modeler. As soon as you want to start to create or build things, you need a Modeler.
A TM1 Contributor is a user that cannot create or build things (models, dimensions, rules etc.), but a Contributor can write and run things. E.g. you need a Modeler to create a cube dimension and an update TI process, but a Contributor can update a dimension or run the TI. If you are using TM1 for a budgeting or some kind of planning application, the majority of your users will be Contributors.
TM1 Contributor Limited Use
Rarely mentioned but potentially interesting. Within TM1 you can define different TM1 servers for different solutions and application areas. For instance you might create a server for the sales reporting and a second one for the finance budget. The difference between a regular TM1 Contributor and a Limited Use one is that a Limited Use one can only use a single server. But in most cases this is just what you need.
An Explorer is a user that can only read and consult things, so that user can read a cube, but not write in it, cannot update a dimension or run a process. If you are using TM1 for reporting where all the update processes are automated, the majority of your end users will be Explorers.
* With Contributor Limited Use, only 1 application server
** for BI Administrator, Professional, Professional Author and Advanced Business Author
IBM COGNOS ANALYITCS SERVER (ICAS)
If you need a server license, A TM1 server license is PVU based. PVU stands for Processor Value Unit. A PVU is a number that is assigned to a specific processor core type by IBM. Every type of processor core is assigned a different number, currently ranging between 30 and 120. A single PVU has a license fee assigned to it. So if you have a quad-core processor with a PVU of 70 per core than your total ICAS license fee is calculated as:
[(PVUs per Core)*(nr. of Cores)*(License cost per PVU)] = [(70*4*(License cost per PVU)]
More information about the number of PVU per processor core type can be found here.
This means that the license cost is not linked directly to what you functionally do with the platform nor with the number of users. Obviously in most cases you will need more processing power when you do more, but not necessarily.
In reality it will depend completely on what you do with TM1. E.g. if you use TM1 as an in-memory database system to store data that you just retrieve without excessive calculations or writeback, you can service a large user community with very little CPU power. If on the other hand you are using TM1 as a complex parameter driven product cost simulation tool, it might very well be that you need a lot of CPU power to service just a couple of users.
A second driver is that CPU in TM1 is usually the limiting factor. TM1 does not execute all tasks in parallel across multiple cores. In fact you will often observe situations where one core is running at 100% and the other cores barely doing anything. In such a case you probably should optimize your design, but more important you are not using the ICAS licenses you paid for. In most cases you can better choose less, but more powerful cores than more, but less powerful cores.
In any case, this is really something to think about, especially because it is difficult to assess beforehand what exactly you will need. It is probably better to start small and reserve some budget, so you can expand when required unless you can do a good deal with your vendor.
If you want to avoid the whole PVU thing, you can go for IBM Cognos Express, that always includes an ICAS server. This can be a good deal as you could buy the Planning and Xcelerator component to develop, and then for production by the TM1 suite as you know exactly what you need by then. Remember that CX has a limitation of one TM1 server. Read more here.
If you are working in a virtualized environment you can opt for Virtualization Capacity (Sub-Capacity) licensing. This implies that you only by PVU licenses for the cores that are accessible by TM1. But you have to pay for the complete core even when you can limit the core usage through your virtualization software. This is the short version, you can find more information about subcapacity licensing here and here.