Various topics pertaining to the technology of license management, both internal to license managers and the use of license managers in software products.
Using a license manager can and should be the foundation of a successful sales/business model. Software demo functionality can maximize control and flexibility by including limited functionality for software evals and demos that are not yet activated. You can also up-sell marginal users, disable features and more.
The ability to easily create eval/trial/demo versions of your packaged software is arguably one of the most powerful advantages to using a license manager. Using an electronic license with an expiration date, and possibly a demo flag, makes your product accessible to would-be buyers. Since electronic licenses can also be easily turned into full, purchased licenses, a trial version of your product is the logical first step in a successful sales process.
There are a few basic guidelines that should be followed when integrating licensing into you software application. Adherence to these guidelines, while not strictly mandatory, will be greatly appreciated by your end-users who will see more consistent implementations from ISV to ISV.
If this title intrigued you at all, chances are you work for a company that sells software it creates, what many call an Independent Software Vendor (ISV). Most ISVs are pretty good at writing software, so when the time comes to consider adding a license manager to their software some ISVs feel it best that they just write the license manager part themselves and be done with it. Here are six things to consider before you build your own license manager.
Independent software vendors who see the need for a software license manager face the universal question of whether to build or buy. Here are a few things to consider before making your decision.
You’ve tried to introduce the concept of software licensing into your company. But, you’re not sure of the best way to move the process forward. Here are some tips to get you to the finish line.
We have assisted many companies in making the transition from “trust-based” to “trust, but verify” with a license manager. To us, the key ingredient in a successful license management project starts at the top: You need executive—hopefully, Chief Executive—support and sponsorship to gain the benefits available from licensing. Since the decision to adopt license management touches so many parts of your organization, you’ll need to make sure it’s clear to others in your company that a licensing program helps increase revenue and provides visibility at the highest levels of your company.
As important as it is to have executive-level support for your licensing program, it’s equally important to have a single focal point from your organization to be the “go-to” person for licensing. Ideally this person is well-known and respected throughout the organization and has good knowledge of the functional groups that will be impacted by licensing and how they will respond. While neither an MBA nor a Computer Science degree are necessary, being able to both “walk the walk” as well as “talk the talk” are important to lending credibility to your licensing program.
The focus for the licensing program should be revenue- and profit-driven (hence the need for an executive-level sponsor). To implement licensing, your company will make an investment in man-hours. To get a return on this investment, there needs to be a payback for this in terms of increased revenue and profitability.
While more money is always a good thing, this shouldn’t come at the expense of customer/end-user goodwill. Remember, software licensing is all about keeping “honest users honest” and giving them an easy-to-use tool to help ensure compliance with the terms and conditions of your existing paper or clickwrap license agreements, as well as to easily acquire more licenses. Taking an overly negative attitude towards customers and end users with your licensing program will be immediately obvious to them and will negate benefits from increased license compliance. Talk to trusted users of your products, or co-workers most in touch with your users (support, sales, etc.) and do a “sanity check” with them on your proposed licensing policies. While no licensing system will make everyone completely happy, on balance, both revenue and customer satisfaction should go up with a well-done licensing program.
First, reconcile your current licensing policies, agreements, and existing infrastructure (if any) with what your marketing and sales teams tell you would be most desirable. If you currently provide permanent licenses, and see that customers are asking about annual subscription licenses, that’s a good place to start. What about adding floating licensing to your existing per-CPU model? Per user? Time zone based? Put time into market research, both internal and external, to figure out where you want to go license policy-wise.
After applying great business policies via licensing, you’ll need some resources. Now’s a great time, if you haven’t done so already, to go back to that executive sponsor with a briefing on what may be possible with software licensing. Do a quick back of the envelope calculation about impacts on revenue and profitability. Be realistic; there may be a short term negative impact to get infrastructure set up, employees trained, and the product and documentation updated. However, there should be an obvious payback in the one-to-three year timeframe.
Deliver your sales pitch: Will your executive sponsor approve the internal resources to implement the programs required to create your dream software license management program; a plan that will ultimately increase revenue and profitability?
Armed with the right team, it’s time to nail down a ship date for your product(s) that will have the new licensing implementation. It’s quite likely that there’s a new release or two already being sketched out on someone’s whiteboard in the company. Request a data change (or set a new one in the future) to accommodate your licensing program. Get support from your executive sponsor if you get push back. On the software engineering side, you’ll probably need a day or so to integrate and test the licensing libraries, change the install routine, and document everything.
You may have some complications in your first rollout of a product with licensing. Hopefully, this will be seen as part of the normal process with software. But, it wouldn’t hurt to try to foresee all possible problems as part of getting ready to roll out licensing. Be sure to have a contingency plan for what happens when a customer is frustrated with getting your software up and running under license management. It may be worth it in the long-run to provide that customer with a temporary “everything works” license to get them over the hump and up and running with licensing. Have dedicated support and on call engineering resources in place when that all-important roll out date arrives. It’s safe to say that you’d be better off having the resources but not needing them due to your brilliant foresight and your thoughtful mitigation of all possible licensing-related problems.
It’s time to brief your executive sponsor on the effects of the rollout of your software licensing program. They were instrumental in getting the program going and they should be able to share the glory of the success of getting licensed products out the door. As part of your rollout plan, put a stake in the ground 30, 60 or 90 days after release to come up with some simple performance metrics.
Have support calls gone up or down? What above revenues? If you time your first licensing release to coincide with the beginning or ending of a fiscal quarter, you may be able to get more bang for your licensing buck.
Make performance stats available as soon as you can and be sure to publish them inside your company. Even if the numbers aren’t all wonderful, give everyone the story, including plans for future releases with licensing, new licensing models in the queue, etc.
Hopefully, your results will be paid back in the short or medium term. Ideally your company is making more profitable use of the employees and infrastructure devoted to software creation and both customers/users and employees are happy with the decision to go to software licensing. If so, great; to the extent you can, keep doing what you have to push software licensing into more products in your company. Some traditional hardware companies now treat their physical products as platforms for enabling what their customer gets via a software license.
We hope you have found this article useful in your quest to adopt software licensing. If you have any questions, please don’t hesitate to contact us.
In this article we attempt to provide a framework for how well-behaved applications use software licensing. Adherence to these guidelines will be greatly appreciated by your end-users who will see more consistent implementations. It is important to consider your end user and long-term support implications when designing your licensing implementation.
In certain circumstances, you could use an Activation Server as a license manager.
This would be the case for very simple, straightforward node-locked licensing. For example, an app that runs on a phone or a tablet (or a simple application that runs on the desktop). Instead of integrating a license manager, you add a call to activate the license, and the activation server performs the initial activation on the first request, and verifies that the license is activated on subsequent requests.
Advantages:
Disadvantages:
Let’s put aside the issue of how the activation keys are created in the first place. There are a variety of ways this is accomplished, depending on your business rules.
When your application runs, you do the following:
It’s really as simple as that. There is a single web services call to perform the initial activation and checks status later.
A while ago, we wrote a blog post entitled 101 license models. Since that time we followed up with posts on unrestricted license models, nodelocked license models, floating license models, and token-based license models. In this post, we explore the fifth set of license models described in that post – the Metered License Models.
To review, a metered license model allow you to consume a resource when your program runs. Your customer can perform an action “N” times, or for a fixed amount of time. These licenses are usable by anyone who can contact the license server. Metered licenses can have any of the following attributes:
Metered licenses have 3 main uses:
In the first case, the license server decrements the meter each time the product checks out a license. For keeping track of how long a product runs, the server performs a decrement to the meter at a specified interval. Finally, for counting events, your software would perform a checkout request when the event happens.
A metered license model gives you control over the software which isn’t available with nodelocked or floating licenses. Metered License Models provide true consumptive licensing.
A while ago, we wrote a blog post entitled 101 license models. Since that time we followed up with posts on unrestricted license models, nodelocked license models, and floating license models. In this post, we explore the fourth set of license models described in that post – the Token-Based License Models.
To review, token-based licenses are a special case of floating licenses which allow aliasing of a license or multiple license checkouts per request. These are usable by anyone who can contact the license server. Token-based licenses can have any of the following attributes:
Token-based licenses are a special case of floating licenses, and they have 3 main uses:
In the first case, packaging together a number of products, let’s say you have product a, b, and c. Create static token-based licenses for each of a, b, and c which map to a checkout of “d”. Now you distribute the “d” license, and all 3 products, a, b, and c can run with this license. Different modes of operation are possible by changing the sharing attributes on the “d” license.
To create an alias, the token definition maps one license checkout request to a different request. This is useful to transition a product’s license name.
For the 3rd case, a generic token name is the only license you deliver. All products have token license definitions which map to the generic license name. As you add new products, they use licenses which your customer already has, thus creating contention for these licenses (meaning increased sales). This allows your customers to demo your new products while consuming existing licenses – no more free demos!
