Why Software Licensing is a Smart Move

By Mike Wozniak | General Licensing Tips

May 08
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This three minute read will validate your decision to use a licensing system and empower you with information as you select the best solution for your needs. Today’s licensing system solutions can deliver more than ever right out of the box and are highly adaptable as your needs evolve.

Modern software licensing solutions prove invaluable to maximize your revenues and minimize costs. These two goals are accomplished through theft protection, automation, advanced licensing schemes, and maintaining control through a robust list of features. Smart features add opportunities and efficiencies for marketing, accounting, and your overall operations.

Protect Against Theft

This is a no-brainer. You would rather have a customer pay for your software than steal it. You may have heard the argument that software is impossible to protect, but we know the same can be said for any product or belonging. No specific type of lock will stop every burglar, but that does not mean we shouldn’t use locks, be it on homes, cars – or software.

A primary function of licensing is to control use through product activation. This can take many forms:

  • Require license keys.
  • Employ encryption technology.
  • Install on specific PCs and/or for specific named users.
  • Install throughout an office and license concurrent users.
  • Assign user-defined parameters.
  • Track usage-based models.
  • Dissuade theft by offering trials or converting illegal copies into trials and more.

Independent software vendors (ISV’s) also count on licensing as a counterbalance against the recent explosion of application and PC virtualization technology which has made it easier to cheat. Your specific application and its users will determine which anti-theft options make the most sense for your application and its users.

Embrace Automation

When you automate you will immediately reap the benefits of 24/7 availability for activations, deactivations, payment collection, notifications, upgrades, tracking maintenance contracts and more.

Making your software available 24/7 means:

  • Increasing sales through increased customer access to license activation and validation.
  • Reducing labor costs for manning the phone for orders and activations.
  • Improving your professional image by providing customers with easy ways of buying from you and activating the software.
  • Achieving peace of mind with a secure system that is making sales and managing licenses on its own.
  • Maintaining software maintenance contracts with pre-set notifications to customers when expiration date is due.
  • Staying in contact easily using notifications for news such as software updates, marketing messages, automated downloads, or other desired actions.
  • Using a rules engine to determine eligibility to purchase discounted software upgrades.

Design Advanced Licensing Schemes

Catapult your earning potential with proven tactics that make it easy for customers to choose and use your software. Licensing systems offer design options at your disposal.

You choose whichever schemes contribute to the most mutually beneficial transactions, and create conditions for easier administration for you and your users:

  • Gain new customers by offering trial usage; try before you buy is a must have option in your sales and marketing arsenal.
  • Meet varied customer requirements by offering versions of your software, such as Lite, Standard and Premium using your single gold master.
  • Increase total revenue over time with ongoing subscription models with a low ongoing price that doesn’t end.
  • Increase customer base by embracing subscription or other usage-based (term license) models instead of perpetual models. This popular model provides an opportunity for you to lower the price to the user. More people can access your software with this lowered barrier to entry.
  • Satisfy your specific customer’s needs creating your own model or by combining any or all of these popular models:
    • pay-per-use
    • pre-paid tokens/credits that are consumed
    • pricing tiers based on the number of users or records in a database

Maintain Control

Sleep well knowing your licensing system maintains control of your intellectual property and keeps you in contact with your users:

  • Control access to specific features or modules in the same application to simplify installations and offer customers more purchase options.
  • Earn additional sales by offering free trials of additional features and converting them to purchases.
  • Support only paying customers validated by maintenance contracts and enjoy the associated cost reductions.
  • Get your software into more hands by using the power of the Internet and e-commerce to reach out to global markets.
  • Get a snapshot of the most important information you’d like tracked with the ease of a portal or dashboard.

You Know You Want It

Software licensing systems are a significant product management tool powering billions of software transactions all over the world. They are relied upon because they maximize revenue, minimize costs, and simply make life easier for everyone. It’s more than fair to say that using a software licensing system can be the difference between achieving success or experiencing failure in getting your software out there, becoming profitable, and retaining and growing your user base.

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About the Author

Mike Wozniak is one of the co-founders of SoftwareKey.com 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.