Should I Buy or Build a Licensing System for my Software?

By Mike Wozniak | General Licensing Tips

Jul 26

Implementing some form of licensing control inside of your software will help protect against theft, increase sales, reduce labor costs, maintain control of your software, and help satisfy varied customer licensing requirements. Today’s market demands this!

Whether you are a software developer or manager, one of the first questions you will face is whether you should buy or build a licensing system.

Ultimately this is more of a business decision than a technical one, and the total cost of ownership (TCO) should be considered when making your choice.

This article provides some considerations to help you in your decision making process.

Option 1 – Building a Custom Licensing System

You or your development team may be thinking, “We are smart. Shouldn’t we just build our own licensing system?” While it may be quick to prototype a simple licensing and activation algorithm (after all, that’s how the first version of SoftwareKey Protection PLUS was born!), it can also be a troublesome distraction for your software development team in the long run. So choose carefully!

Building your own custom licensing system can provide:

  • More Security – If your company’s software development team has the time and resources and is skilled enough to create proprietary interfaces, it is possible that a custom licensing solution is more secure than other options. This is because a potential hacker will need to reverse engineer code that they would likely have never seen before.
    • Think of the example of a thief approaching a locked door on your house. If they recognize the brand name of the lock, they may be armed with information on how to defeat the lock. Whereas if the thief has no knowledge of the lock architecture, he or she will likely need several attempts to reverse engineer the lock and defeat it.
    • As you can see in this related article – 5 Blatant Truths About Software Licensing Systems and Piracy – we make the point that any licensing system (bought or built) can be defeated with enough time and effort on the hacker’s part. Don’t let anyone tell you otherwise!
  • No Ongoing Royalties – Building a custom licensing system allows your company to avoid both upfront and ongoing licensing fees from potential commercial licensing systems. Depending on which commercial licensing system you choose (there are many in the industry, from small unknown companies to large publicly-traded corporations), there are likely to be licensing fees to use their technology.
  • More Control and Autonomy – There may be cases for which the technology doesn’t currently exist to implement the exact desired business logic. Buying a commercial licensing system builds reliance on a 3rd party which may or may not support key technology used to drive your software; or they may not even be around to assist you in the future.

Option 2 – Buying a Commercial Licensing System

A licensing system has many considerations, such as hardware, maintenance, and industry updates… you don’t have time for it all! Even enterprise level companies with home-grown technology are choosing to take advantage of the benefits offered by third party solutions. The companies behind the commercial solutions often have decades of experience, and full-time staff who can look after their licensing solution, including keeping up with new platforms.

Using a commercial licensing system provides:

  • Mitigated Risks – You have access to experts with the knowledge, experience, and processes to ensure your customers can activate and validate their software licenses.
  • Peace of Mind – In today’s world of ever-changing technologies and standards, operating systems upgrades and security patches, and device drivers, it is not a matter of “if” but rather “when” an unexpected event will adversely impact your software licensing system or your company’s IT infrastructure that hosts your licensing server.
  • Improved Focus – When you choose to outsource, you free up vital internal resources, letting commercial experts manage the licensing process for you. This allows your internal resources to focus on other core areas of your business, including revenue-generating initiatives.
  • Lower Costs – Instead of conducting license management activities in house, outsourcing provides a more cost effective alternative, saving your business both time and money. Through outsourcing, you can take advantage of the outsource partner’s economies of scale, streamline your staffing, turn fixed costs into variable costs, and trim your business budget.
  • Enhanced License Management – When implementing your licensing solution, the outsourcing company will focus all of its energy on managing your licenses and related infrastructure. So that you don’t have to work constantly to ensure customers can access your software licenses seamlessly, license management companies take care of that for you! They work day in and day out to guarantee your licensing system continues to work.
  • Advanced Capabilities – When thinking about buying a licensing system, you must ask yourself, “Are they offering anything that I cannot do myself?” Outsourcing companies offer advanced software and proactive services that ensure your license management solution is efficiently managed and delivers enhanced capabilities. These capabilities include secure access to licensing data; improved scalability, continuity, and flexibility; proactive alerting; and improved reporting.

Questions to Consider

Here are some questions to consider when deciding whether to buy or build a licensing system for your software application:

How important is it that my core resources be free to focus on the central operations of the business rather than innovating in other areas such as licensing?

Buying a solution saves significant time and resources you would otherwise have to invest in writing your own solution. Beyond that, having the resources to maintain the software is often the deal breaker in a fast changing technological climate. Don’t forget setting up and managing the server infrastructure as an additional ongoing task.

How important is it to me to have access to a licensing expert to help navigate and recommend the best ways of licensing?
There are many ways to license your software. An outsourced licensing provider often has years of experience to draw upon when seeking the right solutions for you.

Do I want to potentially implement a wide variety of licensing models from the start or is it ok for my development team to build them over time? How much flexibility in a licensing solution do I want for my customers?
A commercial licensing solution has already developed code to handle flexible licensing models and can accommodate:

  • Changing licensing models
  • Multiple pricing models
  • Virtualized system detection and prevention
  • Fast deployment of the initial licensing and new products
  • Integration with other operational software and systems

Do I need my licensing solution to be scalable to handle fluctuations?
Five licenses one day, twelve million the next? Maybe your software is used seasonally and usage rises and falls dramatically throughout the year? Be aware that some licensing solutions have minimums and maximums and can charge for licenses that you never use.

Do I want to be able to support my customers beyond the initial sale by easily being able to offer updates and upgrades, transfers or other changes?
Third party solutions typically offer much more sophistication than in-house solutions.

When a customer can’t run my software because of an operating system upgrade, security patch, software conflict, or proxy server, how much value do I place on having someone to contact to figure out a solution?
Sometimes the support behind a software product or service is more important than the actual features it provides.

Making The Right Choice

There is no doubt that implementing a licensing system for your company’s software has many benefits. Throughout this document, we tried to be impartial in helping you choose between building your own and buying a commercial licensing system. We believe, however, that the SoftwareKey System offers the best commercially-available licensing system backed by countless testimonials of excellent support. Check out this testimonial from a satisfied SoftwareKey customer after 9 years of use:

“I would certainly recommend SoftwareKey to others on the basis that their support is second to none. Other suppliers I have dealt with sometimes take days to respond to a support call. Every e-mail I have sent to SoftwareKey – and there have been quite few – has always been answered straight away with good sound advice. Each support analyst is very familiar with their product and provides excellent, precise support.”

– Mark Fonseca, 3000AD Systems

We know you have many choices when evaluating commercial licensing systems. The SoftwareKey System offers the best technology, experience, and support at prices that are far cheaper and much faster than building your own solution:

  • The largest number of client licensing libraries supporting Windows / Mac / Linux / Java / .NET / Native / Android / ARM.
  • Easy to use client licensing tools for rapid prototyping and full Software Development Kits for customized licensing business logic and user interfaces.
  • Over 25 years of licensing experience!
  • We provide direct support. Our technical resources are just a phone call way to help solve your most important licensing challenges.
  • Competitive pricing that won’t break your bank.

The big advantage of buying the SoftwareKey System for your application is that you get a lot of functionality ready to go at a far cheaper price and much faster than if you were to build it yourself. Plus, you have our experienced licensing resources to help and support your team, allowing you to focus your efforts on your core product line.

Read comments from our many satisfied customers here.

To learn more or get started today, download a free evaluation or request a free 1 on 1 consultation!


About the Author

Mike Wozniak is one of the co-founders 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. He also writes most of the licensing tips here.