| Software vendors have used license management | | | | license around, but only by physically relocating the |
| for many years. Older approaches, such as | | | | dongle. With key-file-based licensing, the license limits |
| key-file-based licensing or dongles, do have a number | | | | and node-locking parameters are encrypted in a file, |
| of drawbacks for the vendor and their users. Product | | | | which is sent to the user and read by the application |
| activation solves many of these problems, so is | | | | each time it runs. |
| gaining broad acceptance in the software industry. | | | | These approaches have a number of disadvantages. |
| Product activation works well for both the vendors | | | | Dongles require the distribution of the hardware, with |
| and their users | | | | all that entails in material cost, shipping cost, delivery |
| Software vendors have used license management | | | | times and management by the vendor. They are |
| for many years. Older approaches, such as | | | | widely disliked by end-users, who don't want to wait |
| key-file-based licensing or dongles, do have a number | | | | for them to arrive, keep track of them, have them |
| of drawbacks for the vendor and their users. | | | | stick out of their computer and so on. |
| Product activation solves many of these problems, | | | | Key-based licensing improves on dongles as the |
| so is gaining broad acceptance in the software | | | | encrypted key files can be delivered immediately by |
| industry. | | | | email, and impose no hardware burden. However, |
| Product activation is widely used by software | | | | they do require the user to provide the names of |
| vendors to protect their applications and enforce | | | | the locking parameters (or run a utility to read them), |
| license agreements. While some users object to any | | | | and do not allow users to readily move their license |
| form of license management, modern product | | | | from machine to machine, as such a move would |
| activation systems are superior to other techniques | | | | require a new key file. An upgrade to a user's license, |
| from both the vendor's and the end-user's | | | | such as extending a subscription, also requires the |
| perspectives. | | | | generation and delivery of a new key file. |
| Software vendors use license management for a | | | | Product activation improves on these older |
| variety of reasons. They are often concerned about | | | | approaches. Fulfillment is immediate as with |
| protection from piracy, and protection against users | | | | key-file-based licensing, but the node-locking is |
| exceeding their agreed license terms (such as the | | | | accomplished automatically at activation time, so the |
| number of installations that run in a customer | | | | user is not required to supply any information, and |
| company). License management also allows the | | | | indeed is unaware of the specific parameters to |
| software vendor to develop, distribute, and support | | | | which the license is locked. Modern activation |
| one version of their application, but offer different | | | | systems also support the relocation of a license by |
| license terms at different prices to different markets. | | | | the user, who can activate their license on one |
| For example, the vendor can use the licensing | | | | system, then perhaps months later deactivate their |
| mechanism to provide trial licenses, perpetual licenses, | | | | license on that first system and activate it on a |
| subscription licenses, set limits on the product | | | | second system. The activation system ensures only |
| features or modules enabled, set usage limits, | | | | one copy of a given license is active at any one time, |
| combinations of all of the above, and offer | | | | thus addressing the vendor's concerns, but the user |
| straightforward upgrades in capabilities, all with just | | | | can move their license from, say, their office machine |
| one executable (some license management systems | | | | to their laptop, then to their home machine, as they |
| even allow the vendor to also offer floating licensing | | | | wish. The activation system can also automatically |
| either over the end-customer's network or the | | | | transfer user settings, so the newly-activated |
| Internet based on this same executable). Finally, | | | | installation comes up exactly as the user had |
| license management can enable the vendor to | | | | configured the old one. |
| automate fulfillment, management and reporting, so | | | | If the user upgrades their license, perhaps by |
| reducing operations costs and offering immediate | | | | converting a trial license to a production license, |
| delivery worldwide 24x7 to their customers. | | | | extending a subscription, or purchasing additional |
| A key concern for software vendors is ensuring | | | | features or modules, the vendor simply updates the |
| users don't just give the software to unlicensed | | | | record for that user in the hosted activation system, |
| friends and colleagues, or even post it on the web | | | | and the user clicks a menu command to update their |
| for anyone to download. The standard solution is | | | | license, causing the new limits to immediately take |
| called node-locking, where each user's installation is | | | | effect. |
| locked to one or more parameters of their system, | | | | Product activation systems therefore meet the |
| such as the MAC address. Each time the application | | | | software vendors' need to protect against piracy, |
| runs, it reads, say, the MAC address of the | | | | offer a range of license models, and automate |
| computer where it is running, and will proceed only if | | | | operations, but remove many of the inconveniences |
| the address it reads matches the one recorded for | | | | and costs of older license management systems. |
| that license. | | | | Early product activation systems that didn't support |
| Older approaches for license enforcement include | | | | such capabilities as activation on disconnected |
| dongle-based licensing and key-file-based licensing. A | | | | systems or license relocation did give the approach a |
| dongle is a hardware device that plugs into the user's | | | | bad name, but modern product activation systems |
| computer; when the application runs it checks for the | | | | have this flexibility so are gaining acceptance with |
| presence of the dongle and will run only if it finds it. | | | | vendors and users. |
| Dongles do therefore allow the user to move their | | | | |