Software Licensing Management: What Tools Are Needed and When to Hire Professionals

By Mike Wozniak  |  About Software Piracy, Software Copy Protection System

Posted:  October 11

Large files in binders stored on laptop computer.

What Is Software Management?

Software management is an umbrella term that can mean different things to different organizations. It can focus on managing software assets by tracking internal use, or it may refer to software license management that authenticates and enforces software entitlements.

What software licensing management and software asset management have in common is that both typically have a client-side and a server-side component, so the two components work together to monitor or control software usage. Next, we’ll explore the difference between software asset management and software license management.

What Is the Difference Between Software Asset Management and Software License Management?

Software Asset Management

Software asset management (SAM) is a system that tracks the software assets within an organization to make sure they have what is needed and that it’s being used within defined limits. For example, an IT department might deploy a software asset management system to control and track internal use, adoption rates, and ensure they are adhering to licensing and compliance regulations.

SAM systems help companies ensure they are compliant across all software vendors used, producing verification reports which are necessary in case of an audit.

Software License Management

Software license management helps an Independent Software Vendor (ISV) enforce license compliance through a product activation and computer fingerprinting system. This helps ISVs maintain control of their software and combat software piracy, especially when they do not wish to rely on audits or the honor system.

How Does a Software Licensing Management System Work?

An automated licensing system has two components:

  1. The client-side gets installed inside the software before being distributed to end-users.
  2. A central licensing server is connected to the internet and contains all the software license entitlements for customers along with related recordkeeping of license usage.

Licensing functionality is incorporated into your software, which can validate against an encrypted license file as well as a central license server. The server allows you to easily manage customers and licenses to maintain control over the use of your software.

The most effective way to manage how end-users deploy the software is by enabling a software license management strategy. There are many potential strategies you can leverage which can include license types such as subscription, perpetual, concurrent user, pay per use, or feature-based.

What Are the Risks of Poor Software License Management?

For software companies, the consequences of poor software license management are huge. In the US alone, it’s estimated that more than $9 billion worth of software is being used illegally in business

Worldwide, estimates exceed five times that amount.

Businesses (and consumers) may buy a single-user license for a piece of software, but then use it on multiple devices in violation of the End User Licensing Agreement (EULA). While license keys may be required to authenticate software when it’s initially installed, without active software licensing management, software and/or keys can be duplicated.

It’s essential to continue to monitor software licenses beyond the initial authentication. You can't skip the step of continually monitoring the software licenses. Periodic validation is required if you want to maintain control.

A common practice is to allow customers to transfer licenses or move licenses from one computer to another. If you allow them to do that, having the software periodically validate with the central licensing server is essential to enforce continuing compliance after the transfer is performed.

Poor license management will be cumbersome for you and your customers. It can also be costly for software companies. Costs add up quickly, including:

  • Lost sales that you are entitled to.
  • Labor costs to support a user base that hasn’t paid for your software.
  • Granting updated licenses to unauthorized users.

Another common problem is that unlicensed software can create a poor user experience that reflects poorly on your organization. When users pirate software, they often use older versions or download versions containing malware.

What Tools (Or Other Software) Are Needed to Have Proper Management?

For software license management, you can build your own software licensing service solution, or you can purchase a commercial one such as the SoftwareKey System.

Organizations always need to balance costs with the best use of resources. Do you want your developers and IT team tied up with creating and managing software management tools or are you better off outsourcing the solution, so you can focus on your core business?

Creating a robust licensing system involves many hours of complicated work, but even if you manage that, there are always ongoing issues. Your in-house system may work fine until the server goes down and customers can’t activate or use their software. This causes productivity to drop for your customers, and they are likely to blame you for it. It leaves a bad impression and can damage your reputation.

Protect, Automate, and Manage Your Software

The SoftwareKey System allows you to securely distribute your software and maintain control to make sure users remain in compliance. This is accomplished through tools that enable copy protection and central license servers to automate license compliance enforcement. When your software is opened, or periodically over time, our licensing servers help make sure the application is authorized for usage.

This maximizes your revenue by requiring customers to purchase a license to use your software.

With SoftwareKey, you get:

  • Copy protection,
  • Electronic activation & management,
  • Support for different licensing models,
  • Multi-platform support,
  • A scalable software licensing solution,
  • Support for integration with third parties,
  • Integrated shopping cart options,
  • Activation support for offline environments
  • and more.

Simply put, SoftwareKey provides the most powerful license management software solution on the market along with centralized controls to manage license enforcement. For more information or to get a free product demo, contact the software licensing experts at SoftwareKey today or sign up for a free trial.

About the Author

Mike Wozniak is the founder of and responsible for marketing, content and product strategy. When he isn't plotting new ways to help customers solve licensing and business automation challenges, he likes to travel and entertain guests who come to visit the Orlando area.

Mike Wozniak


Related Posts

Software Licensing Management: What Tools Are Needed and When to Hire Professionals

Software Licensing Management: What Tools Are Needed and When to Hire Professionals

How Much Is Software Piracy Costing Your Business and How Can You Prevent the Loss?

How Much Is Software Piracy Costing Your Business and How Can You Prevent the Loss?
{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}