Discussion of the business of license management, ranging from whether to buy or build a license manager to various pricing models.
What's the real purpose of software license management?
Too often folks equate Software Licensing with the prevention of software piracy. That notion really misses the point. People are often surprised to find out the real reasons for software license management.
RLM’s Simple API makes executing tactical adjustments to pricing and licensing policies easy
In these tough economic times it is critical to have the flexibility to address complex licensing policies quickly and easily. In a previous article RLM’s ‘Policy is in the License’ methodology was discussed, explaining how the RLM license policy is largely removed from your application. Since the license policy is defined in the license keys, a single binary can support many license policies.. Once RLM is implemented, you can address ever-changing business rules by simply varying the type of keys that you issue. RLM can support a wide range of licensing options and policies. Many of these policies have been covered in previous articles and are summarized here (with link to original article):
The remainder of this article will briefly discuss a few other optional license fields. The following license keywords can be classified as ‘vendor defined’ options as they are not used by RLM to determine policy, but can be accessed by your application to further restrict usage rights or present information to the end-user:
Even though it is wise when starting out to keep the implementation relatively simple, it is very important to have options to address the changes due to market pressure, economic stress or customer feedback. RLM’s licensing methodology gives you the flexibility to address the ever-changing business rules. Reprise Software’s experts can help you plan your optimal approach. Please feel free to contact us to discuss.
How do I harness the power of the license manager? What rights should I give to my customers? Let's first look at basic elements of a license that you can control, then look later at some other important parameters that can further refine your licensing policies.
Independent software companies are increasingly relying on innovative software licensing and pricing strategies to create steadier revenue streams. They are looking for smoother and more predictable revenue growth to make financial planning easier and to increase business efficiency and to maximize value to shareholders.
Well, approximately.
Happy Birthday, FLEXlm!
February, 1988 was the month when I started the development of FLEXlm. I recall that, at the time, we all felt that we might have a good 3-5 year run with the product before someone like Sun or HP came in and took away the market.
We never would have expected it to be going strong 20 years later. I certainly would not have thought that some of the same code would be in the product now. But, as my son likes to say, “I can predict the future – I’m just usually wrong”.
At any rate, here’s a big “Happy Birthday” to FLEXlm!!!
As Independent Software Vendors (ISVs) continue to adopt RLM in increasing numbers, we're asked to provide advice on how to optimize the process, helping to ensure a smooth transition from another technology to RLM.
From the early days of network computing, users of high-value software urged their vendors to provide innovative licensing models that matched the way they used their software. They wanted low-cost licenses that were restricted to heavy users, and were willing to a pay higher price per license for the added convenience and utility of floating licenses that could be shared among more infrequent users on the network. Vendors responded by implementing a software license manager that offered a menu of license choices allowing the customer to decide which license model or collection of models best fit their overall usage profile.
History of License Management: The Market Matures (2000-)
By the year 2000, all the original players who had experienced reasonable success in the License Management business (GLOBEtrotter, Elan, and Wyatt River) had been absorbed by public companies. By this time, the FLEXlm product was the clear winner with over 80 or 90% market share.
The next several years were marked by a slowdown in innovation as the original entrepreneurs who had defined the market and developed these products were replaced with larger development teams and more of a “management by committee” process in the larger companies.
In my view, innovation slowed down for 3 reasons: first, the early period of rapid product development and customer acquisition had passed; second, the people who enjoyed working with the product and the market were gone, and finally, while the early market was dominated by private companies who were focused on the product and their customers, after 2000 this changed to public companies who were focused on their shareholders and quarterly revenue and profit.
By the end of 2005, many ISVs and end-users had grown tired of having no real choice for a license management solution. By starting Reprise we gave them another choice and we believe that the resulting competition will make innovation move a bit faster.
Software License Management: The Golden Years (1990-2000)
The 1990’s were the years when License Management really became accepted in the ISV community. From a start of fewer than 50 ISVs using commercial license management systems, by the end of the decade there were over 2000 ISVs shipping products with embedded commercial license managers. The adoption of license management, however, was primarily among vertical-market applications, as opposed to the more general desktop productivity applications.
In 1990, TCP/IP was primarily used on Unix systems, with Netware dominating on DOS systems, and a viable Windows OS still a few years off. Most commercial license managers were based on the TCP/IP stack. To the best of my knowledge, FLEXlm was the only license manager that used TCP, others used UDP or some kind of RPCs.
The early 1990’s were a time of many system vendors building workstations and servers running one variant of Unix or another. I recall in the early 1990’s supporting FLEXlm on over 40 Unix platforms. (The good news is that the Unix/Linux market has consolidated, and the vast majority of these systems are gone today.)
As the decade wore on, the users of license-managed software began to realize that there was value to them in having a license manager embedded in applications which they purchased. With an embedded license manager, end-users no longer needed to worry about keeping track of their license agreements to ensure that unlicensed users were not using the software – this was now built into the software they purchased. In addition, end-users were able to get usage data on purchased software, which enabled them to predict future software purchases and in some cases bill software usage to various departments within an organization.
As the decade wore on, license management capabilities for end-users became more and more sophisticated, allowing them finer control over how and where licenses were used.
Once end-users saw the advantages of a license manager, it moved from being a burden an ISV imposed on their customers to a more normal course of business. This, in turn, accelerated the adoption of License Management among ISVs.
For part 4 of this article, click here
License Management – You Can’t Tell The Players Without a Scorecard
There have been quite a number of players in the License Management Market over the past 18 years. This is the story of some of them.
While there are many kinds of software and hardware solutions which might be called software license management, I want to make it clear that I’m describing license management systems that ISVs build into their software, as distinct from Software Metering products (which, while similar, are voluntarily used by end-users), or any kind of copy protection such as key disks or dongles.
Apollo Computer had the first commercial license manager, the Network License Server, sometime in late 1987. Apollo was later acquired by Hewlett-Packard, the product was renamed NetLS, and shortly after that, it was licensed to Gradient who developed and marketed it through the 1990’s. This product became IBM‘s LUM in the late 1990’s or early 2000’s.
NetLS’s claim to fame was that it used DCE (Distributed Computing Environment), which had the “Global Location Broker”, which allowed a client to find the license server wherever it was on the network. Unfortunately, reports from the field indicated that the Global Location Broker was difficult to configure and unreliable. Most NetLS customers eventually converted to FLEXlm, I believe largely because of the Global Location Broker.
The second commercial license manager was FLEXlm, from a partnership of Highland Software and GLOBEtrotter Software. Highland did a great job of getting FLEXlm adopted early-on, and by the early 1990’s, it became clear that FLEXlm would be the technology of choice among ISVs for Software Licensing. Unfortunately, as the product became successful, there were disagreements between Highland and Globetrotter, which led to the eventual purchase of Highland’s interest in FLEXlm by Globetrotter in Jan, 1994. GLOBEtrotter then continued with the product until Aug 2000, when the company merged with Macrovision Corp. The GLOBEtrotter name disappeared in 2002, and FLEXlm was renamed to FLEXnet Publisher in 2003.
Several companies were able to gain a foothold in the market during the 1990’s. Among these were:
Elan Computer Group had a product called ELM (The Elan License Manager), starting around 1989 or 1990. This was a good product which gained a substantial amount of market penetration (their largest customer was AutoDesk). Elan entered into a partnership with Rainbow Technologies in 1995 to re-sell ELM (under the name SentinelLM), and in 1998, Rainbow purchased Elan.
Another small company was Viman, who later merged with Wyatt River Systems. The Viman product, while less popular than Elan, had some acceptance especially among small EDA companies. Wyatt River was purchased by Rainbow in 1998, and the Wyatt product became the next version of SentinelLM.
Rainbow Technologies was the largest player in the hardware key (dongle) business. Rainbow had a network license manager which they called SentinelLM. They replaced this product with the Elan product in 1995. Then, in 1998, they replaced the Elan product with the Wyatt River product. In 2004, Rainbow was sold to SafeNet, who continue with the SentinelLM product line, now called Sentinel RMS.
Aladdin Knowledge Systems was the #2 dongle manufacturer who released a license management system called Privilege in the late 1990’s.
From about 1989 onward, there were other competitors who appeared, but only the ones listed above were able to gain much of a foothold into the License Management Market. Some of the companies/technologies which appeared during this time, but have since disappeared were:
Of this last group, Digital was perhaps the most noteworthy, having licensed PLS to Microsoft. However, in the end, Microsoft never used the PLS product, Digital was sold to Compaq, and the product disappeared. PLS was the first (and so far, the only) product to put virtually all license policy into the license key itself, removing it from both the application and the license server.
In addition, there were a number of attempts made to standardize one or another part of license management. None of these went very far, either. Among these were:
In 2006, I brought several members of the GLOBEtrotter team back together to from Reprise Software, Inc. We developed the Reprise License Manager (RLM), which began shipping in 2006. Our goal was and is to use our experience building and supporting FLEXlm for over 2000 ISVs in order to build a better product.
For part 3 of this article, click here
