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101 License Models – Floating License Models

A while ago, we wrote a blog post entitled 101 license models.  Since that time we followed up with posts on unrestricted license models and nodelocked license models.  In this post, we will explore the third set of license models described in that post – the Floating License Models.

The Floating License Models

To review, floating licenses are the most commonly used license models.  These licenses can be used by anyone who can contact the license server.  The floating license models provide the richest set of license control. The floating license models we talked about are these:

Ways to use floating license models

Floating licenses are not generally locked to any machine – although they can be. They are served by a license server which is itself locked to the host where it runs.  In other words, in general floating licenses work anywhere, but only up to the maximum concurrent license count imposed by the server.  Floating licenses are the most popular licenses used by software publishers since they allow the maximum flexibility in pricing as well as day-to-day usage by end-customers.

The traditional, or “plain vanilla” floating licenses are by far the most popular of all.  They allow a software publisher to sell more valuable licenses (often at a higher price) as compared to node-locked licenses.  For the customer, the added flexibility to use a license on any client on their network provides significant extra utility and value, when compared to licenses node-locked to each client.

The other models listed are generally variants of the traditional floating license.  By adding these attributes to the license, additional restrictions apply.  Often a publisher will restrict the timezone where a license is available, or the platforms on which the software is allowed to run.

named-user license is a special case of a floating license. It allows the customer to assign particular users to the licenses.  Over time, these users can be changed, but not too often. This gives the customer the flexibility of a floating license model, but restricts the usage to the names on the list only, not to the general user population.

Finally, license sharing (for example,  shared by host) allows multiple instances of the software while consuming a single license.  In the case of shared by host, multiple instances running on the same host would consume only one license.

We will explore the last two License Models (Token-based and Metered) in future blog posts.

Zeenyx Software Relies on Reprise

Zeenyx Software Relies on Reprise

Zeenyx has been using RLM in its product, AscentialTest, since 2009. They feel certain that they made the right choice right from the start. Their customers consistently find that RLM is both easy to deploy and administer. They appreciate the flexibility of their deployment choices. They are happy to see that the Reprise team continues to keep up with changing requirements by offering their RLMCloud solution. Zeenyx plans to provide RLMCLoud as an option in the future.

Currently Zeenyx uses node-lock, time-based licenses to support free trials. Almost all of their installations use the physical license-server model with a few exceptions where customers have chosen to use a hardware key so that they can deploy their license server on a virtual machine.

About Zeenyx Software

Zeenyx Software, Inc. provides an enterprise level Test Management System that encompasses test planning, development, data management, and execution. Founded in 2006, Zeenyx created AscentialTest, a next generation testing solution that eliminates the need for programming skills, allowing users to build robust, highly maintainable, and reusable tests. AscentialTest is helping Fortune 500 companies reduce the cost of testing by making testers more productive.

Home Brew replaced by RLM at Live2D

Turnkey licensing solution over Home Brew

As a small developer of graphics software, we were looking for a way to securely distribute our software globally. Our first option in 2013 was to develop our own “home brew” license management system.

We wanted to protect our product in a way that was robust yet fair to our customers.  However, developing such a protection system could drain too many resources that could have been used to improve our product. Even if we managed to develop a decent license management system, it would have required further development effort.  We would still have to handle maintenance, patching holes, and developing a user interface that could be used across our organization.

We started looking for a turnkey software licensing solution from an experienced company. After speaking with multiple potential vendors, RLM stood out for many reasons. The professional support and advice we received from Reprise addressing both technical and commercial issues was Reprise’s most notable advantage. For example, Reprise asked us which parts of our product we truly wanted to protect. We then realized that we were trying to address every possible scenario, however unlikely. This question led us to focus on what was really important to our business and to avoid pitfalls.

After four years, RLM has become an integral part of our business and will continue to be in the future.

FX Vendor Mootzoid switched to RLM

Mootzoid switched to RLM from “home-made licensing”

Mootzoid switched to RLM

In 2008 Mootzoid started developing and selling plugins. At that time, no software license manager was used because the number of customers and users was just too small to justify investing time or money into a software licensing system.

As the user and customer base grew, the need for a software licensing system became evident. Mootzoid developed a very simple in-house software licensing solution in 2010.

It worked well at the beginning.  However, problems became apparent after only a few months. Too much time was required to maintain and support this very limited proprietary software licensing system. Furthermore, larger studios and potential customers expressed their doubts about the ‘amateur’ licensing system.

Switched to RLM

In 2011 Mootzoid decided it was time to dump its in-house licensing and switch to a more robust system.  Mootzoid wanted a system that was used by other software development companies.  They also wanted a system that was familiar to systems administrators of larger studios. At that point, Mootzoid switched to RLM.

Adding RLM licensing to the Mootzoid plugins was done in one afternoon.  Acceptance by the customers was good. Studios expressed their satisfaction that the Mootzoid tools were now using something that fit better into their existing licensing process pipeline.

Since 2011 all Mootzoid plugins running under Window, Linux and OS X are using RLM.  The decision to make the switch has never been regretted.

About Mootzoid

Around 2008 Mr. Eric Mootz decided to stop freelancing and to instead develop and sell plugins for 3D applications under the name “Mootzoid”.

The first two plugins were a fluid solver and a particle mesher, both available for the Softimage platform only. In the years that followed, the plugins were continuously enhanced, were ported to other 3D applications and were used by increasing numbers of freelancers and studios around the world. During that time new tools were developed as well, including flocking solvers, particle renderers and versatile meshing plugins.

All tools have been used in many film productions such as TV commercials and movie projects. Several schools of 3D and universities in Europe, Australia and the USA take advantage of the Mootzoid free educational license model, using the plugins exclusively for teaching and research purposes.

Software Monetization – That’s Fancy Talk

“Software Monetization” – What does it mean to your business?

Industrial companies are increasingly using software as the driver of their future growth. Sustainable growth is fed by profits. But to grow profitably, you need to ensure that your software infrastructure has the proper licensing controls built-in, so that you can get paid for the fair use of your products.  This is what we mean by “software monetization”… turning your products, whether software or software-driven devices, into dynamic, profitable businesses.

Protect and Defend

The first step is IP protection. Adopt a technology that gives you a satisfactory degree of security to prevent unlicensed use, and to deter imitators (grey-markets) who would use your IP to compete against you. We all know that no software is totally hack-proof, but you have to make malicious attacks against your products non-trivial.

Control through SOFTWARE MONETIZATION

Once you have protection built-in, you can ensure that your customers fairly pay you for their use.  The best way to accomplish this is through tamper-proof licenses that specify the terms of use in the license. Licenses can define expiration dates, rights to future updates, where and how much of your software can be used, and license sharing attributes, among others.

SeamlessNESSsoftware monetization

Consider how your customers will obtain licenses or activate your software. Fully leverage near ubiquitous connectivity to simplify installation and authentication, whether it is through in-product activation or by supporting floating licenses by deploying license servers in the Cloud. Your choices should reflect how your customers use your products, as well as their own preferences. For example, some customers will insist on staying off the public Internet, so make sure you have a strategy for these cases.

Shake the Trees

Increasing profitability comes from both your current base, as well as new markets. Monetization means extracting revenue from existing bases by giving them choices of new feature bundles, and by scaling price to the value that they receive. New pricing models, such as monthly/annual subscriptions, token-based licenses, and usage metering may cast a wider net into your existing markets. Perhaps a super-low price point, or even a free version is a way to broaden your base. Conversely, there may be valuable features that you currently bundle that could be offered as an up-sell opportunity. Monetization also means delivering totally new products/features using the same licensing technology to derive new sources of revenue.

Product Lifecycle

Your customers are always on the move, and that means your licenses have to move with them. With software licensing, you have mechanisms for customers to self-serve. After your customers easily convert a trial versions into paid versions, they can later move licenses to a new machine, or add new modules, or upgrade to a new release. In all cases, access is in their hands, but you are always in control.

Software licensing also helps manufacturers simplify supply chains by reducing the number of unique physical devices needed to address multiple market segments while extending the useful lifetimes of these devices.

Business Intelligence

What if you could know which parts of your products were used the most, how often? With software licensing, you can gather and monitor actionable product usage data, not just to calculate an invoice, but also to gain marketing insight into how your product is used, and where to allocate precious development resources.

Software licensing services easily tie into CRM and E-Commerce/payment platforms for speedy quote-to-cash.  This means timely revenue recognition and an improved customer experience.

Build on the Shoulders of Giants

In-house development of software monetization tools offers little competitive advantage. Worse, it can derail engineers from development of new features where true product differentiation and competitive advantage lives.

Fortunately, today’s software developers welcome the paradigm shift toward designs built on a combination of licensed code and in-house application software. By acquiring a 3rd-party software monetization solution rather than building it, development organizations enable themselves to focus their efforts on delivering more innovative products more quickly within shrinking market windows.

Top 3 Software Licensing Models

This article discusses the Top 3 Software Licensing Models – subscription license, perpetual license and consumptive license.

Software customers and publishers negotiate pricing based on both the perceived value of the application and how the application will be used.  The software licensing model defines how the product will be used.  Let’s define the top 3 software licensing models.

Perpetual license – a non-expiring license to use an application. The customer has no obligation to pay for support or update services.

Advantages: Simple to deploy and manage. Customers may be able to expense the purchase as capital.

Potential downside: Difficult to securely handle machine upgrades and software redeployment. Publisher is locked into the old license policy for years.  Customers may end up using very old software versions to save money if they elect to forego maintenance.  This in turn could lead to poor publisher reputation when software becomes outdated. For the customer, perpetual licenses require larger initial outlay.  For the publisher, perpetual licenses require a steady stream of new license sales to maintain revenues. Pressure to discount is high.

Subscription license – a renewable license, usually annual, including software support and updates during the coverage period. The license is automatically terminated unless it is renewed.

Advantages: Encourages steady, predictable revenue flow to publisher. Lower initial cost for the user, faster approval cycle. Allows for short-term rentals. License policy can be changed at renewal time. Limits license exposure to overuse when machines are decommissioned or upgraded. Customers are able to annually expense the budgeted license renewal fees. Less price discounting pressure. Encourages on-going client-vendor relationship.

Potential downside: Increased license management overhead. Requires accurate record keeping to manage license life cycle.

Consumptive license – This license has a periodic fee based on usage. Payment can be before or after use. Example cases: overdrafts, utility-pricing based on time or work done, etc.

Advantages: Maximum license and pricing flexibility. Price most closely related to value. Encourages steady revenue flow to publisher. Lowest initial cost for the customer. The customer is never denied a license.  License policy can be changed at any time. Customers may be able to expense the license fees as they occur, perhaps monthly. Least price discounting pressure. Encourages on-going client-vendor relationship.

Potential downside: Requires most license management overhead. Reliable license usage reports must be created periodically, and mid-cycle to check against budget. Licensing must be integrated into CRM or accounts receivable systems. Customers may have issues with privacy.

Cloud-Based License Management

This Article Describes Cloud-Based License Management and in particular several problems solved by this approach.

Traditional floating licensing requires a license server installation on the end customer’s network. Although this deployment strategy is still the most common, you can improve the situation by moving the license servers into the cloud. Let’s look at the issues where Cloud-Based License Management can be of some considerable help.

The crux of the matter is that when you deliver licenses to your customer, you lose control. When you manage your customer’s licenses in the cloud, then you retain control. It’s that simple.

Some of the advantages of delivering licenses in the cloud are…

Customer Preference – Some customers don’t want to set up a license server. They feel this is the vendor’s responsibility. Most small customers don’t have in-house IT support. Licensing in the cloud eliminates the need to install and maintain the license server locally.

Reduce Support Time – Installing a license server can sometimes cause problems. Licensing in the cloud eliminates this task altogether.

Instant Revenue – The publisher can recognize revenue immediately. No more waiting around for the customer to track down the hostid of the server.

Use Anywhere – Your customer can run your software anywhere: on virtual machines, in classrooms, labs, at off-site training, and at trade shows, etc.

License Rehosting – Traditional floating licensing makes it difficult to securely rehost a customer’s license server when it fails or when it is decommissioned.  This is not an issue with licensing in the cloud.

Suspend/Reinstate Licenses – Traditional floating licensing also made it difficult to terminate or suspend licenses. With the license server in the cloud, you can easily deal with non-payment or lapsed subscriptions.

Modify license inventories – With cloud-based license management, it is easy to change license counts up or down, and handle version upgrades.

Usage-based licensing – Pricing software based on usage relies on accurate records. In traditional license server deployments, license usage data is collected at the customer site, making it difficult to collect. With cloud-based license management, the report log containing the usage data is on the cloud, not at your customer’s facility.

Always up-to-date – Your cloud-licensed customers take advantage of upgrades to the server software immediately when released. Backward compatibility of the client-side ensures this.

Failover Servers – Maximize license server up-time with automatic failover server setup, at multiple datacenters.

MecSoft Uses RLM to Improve and Automate its CAD/CAM Software Licensing

In early 2015 MecSoft Corporation started looking for a solution that would allow it to transition away from a hardware key (dongle) based licensing to automated software licensing for its popular line of CAD/CAM products. They needed to make the shift due to the expense and delay programming and shipping individual dongles.

The resulting lack of automation in the license fulfillment process also hurt their ability to provide customers with immediate access to its software applications. They also realized that they needed a software based licensing system that:

  • Could protect products and proprietary information.mecsoft uses RLM
  • Could be effectively integrated with their existing sales platform.
  • Was scalable to both current and future offerings and increasing sales volume

MecSoft looked at many different systems before finally settling on the Reprise License Manager (RLM). They decided to work with Reprise Software because Reprise offered a solution that:

  • Was mature and sophisticated which met not only our needs but also those of our customers.
  • Handled licensing scenarios that satisfied the existing demands of their product offerings, while also providing a viable platform for their future needs.
  • Provided excellent documentation and tech support that allowed them to get started quickly and adapt to the initial integration process.

MecSoft released its products using RLM technology in 2015. According to Mr. Joe Anand, MecSoft’s President, “The systems are functioning as expected and, I am happy to say that, with the help of RLM, we have successfully met all the goals that we set for ourselves when we started this transition process. ”

Our Future with Reprise

Mr. Anand continued, “We have also talked with Reprise about their newest internet-based network licensing system, RLMCloud, and are planning to incorporate this system into the next release of products. We are thrilled that Reprise has been able to provide us with their cutting edge of licensing technology which has allowed us to focus on our core competency while taking advantage of theirs. “

About MecSoft

MecSoft Corporation is a developer of standalone, as well as integrated CAD/CAM software solutions for both the subtractive (CNC machining) and additive (3D printing) manufacturing industries. With a focus on developing easy, powerful, and affordable CAD/CAM software solutions, its goal is to continue to provide manufacturing professionals with the best price-to-performance CNC and 3D printing software.

Post Use Billing

Post Use Billing – an alternative to Subscription or Permanent License Grants

There are situations where it is impossible to anticipate the level of usage of a software package before it is actually used.  In cases like this, a fixed number of permanent licenses or subscriptions may not satisfy your customer’s needs.  Many ISVs and their customers prefer a licensing option which allows the software to be used in excess of some predetermined limit, and then invoiced after-the-fact for the actual usage which exceeds this limit. This type of license model has been referred to as Pay-Per-Use, or Metered or Post Use Billing.Post Use Billing

Of course, your life is full of real-world examples of post use billing: your water bill, your electric bill, etc.  Why not adopt this common model to software as well?

RLM supports most flavors of this license model with a combination of metered licenses and an authenticated usage report log.

RLM supports metered, or pay-per-use licenses, with the METER keyword in the license line. When you create a METERed license, the license server maintains a number of meters each with an individual count. When your application runs, the license server decrements the meter after each successful license checkout, and (optionally) periodically while the application continues running.  To utilize this effectively, the license server needs to be under your control, ie. not installed on your customer’s network.  RLMCloud is perfect for this, since you control the servers and hence the meters.

Alternately, you can issue more floating licenses than your customer has purchased, then use the report log to determine usage in excess of the purchased licenses.  At the end of the month, for example, you would invoice your customer for the excess usage.   This is possible because RLM’s usage report logs are authenticated  so that you can verify that they haven’t been modified.  Even better, if the license servers are under your control in RLMCloud, you have continuous access to the report logs.

By using a Post Use Billing license model in addition to your normal permanent or subscription licenses, you can help your customers utilize your software more effectively as well as increase your revenues.

RLM and RLM Activation Pro – what’s the difference?

RLM and RLM Activation Pro

rlm-and-rlm-activation-pro

Sometimes people are a bit confused by the Reprise product line, in particular, wondering about the difference between RLM and RLM Activation Pro. The two products work together, and both products involve a server component, so that’s the basis for the confusion.

Let’s start with a couple of definitions:

  • RLM (the Reprise License Manager) is a software license manager. You (a software publisher) integrate RLM into your product, and RLM keeps track at runtime who is using your product licenses. RLM can do this entirely within the client library (linked into your application), or, more commonly, your application makes a request of the RLM License Server to “check out” a license. The license server runs either on computers in your customer’s network, or in the cloud if you are using our RLMCloud service. Your application uses RLM every time it runs to verify that the license rights are still present, thus enabling use. RLM, however, never gets involved in the issuing of the actual license files to your customers.
  • RLM Activation Pro, on the other hand, is a Software Activation product. Software Activation’s purpose in life is to generate and dispense the license files for your product to your customers with minimum fuss. Activation Pro also has a server component which we call the activation server. Your application contacts the activation server and supplies a short text activation key, and in exchange, the activation server returns the license which enables your product. Generally, this is done once, right after your customer purchases your software, not every time your software is invoked.

So in summary, RLM provides runtime checking that your application is licensed to run and that the current usage of your application is within the limits you have set, every time your application runs. Activation Pro is used once at the time your customer purchases your software in order to retrieve the license file which is specific to that customer.