Software Monetization Featured Article

Software Licensing: The Benefits of Going Keyless

August 17, 2015

Remember the days when software came on a disk and you had to enter a license key to activate it? Not only that, you also had to store the license information somewhere safe, in case you ever needed to reinstall the software. Although this was made a little easier when software delivery went online, keeping track of license keys still poses a challenge today.

Gemalto’s (News - Alert) (formerly SafeNet) Senior Product Manager of Software Monetization, Kapil Digani, recently blogged about this very issue, stating that, “From the ISV’s perspective, these challenges can occur at any stage of the key management cycle; from generation through delivery and upgrade. For example, if a key is lost, misplaced, or misused, a customer might feel frustrated at not being able to use the product, and this in turn can lead to a poor customer experience and potential revenue loss for the ISV”. However, ISVs are not the only ones frustrated by this system – end users, too, can relate to the pain of losing keys and not being able to activate the software they’ve paid for. Worse still, they need to worry about whether they are in compliance with the terms and conditions for using the software.

There has to be a better way, especially given the sudden proliferation of personal and professional devices entering the market. Demand is growing for software that can work across multiple devices and deliver a consistent and secure user experience. The way in which software is delivered, consumed, and invoiced – as well as how intellectual property is protected – is having a transformative effect on business models. Nowadays, ISVs expect to be able to accurately track usage, not only for compliance and billing purposes, but also for product planning and packaging. 

As Digani writes, “What ISVs and end users need is a solution that simultaneously protects copyright, simplifies management, and seamlessly enforces compliance.” The good news is that a cloud-based solution already exists in the form of software monetization.

In fact, Gemalto, through its licensing and entitlement solution, Sentinel Cloud,  provides a way for ISVs to protect and license their applications without any of the problems associated with generating, delivering, and upgrading product keys. “Cloud-hosted license servers,” notes Digani, “interact with software applications, ensuring that the applications always have the latest licenses and can only be operated by end users with the appropriate entitlements. This eliminates the pain of having to manage product keys manually, and provides a view of all the licenses available to the end user”.

There are substantial benefits to moving licensing and entitlement management to the cloud. These include:

  • Integration with legacy on-premise solutions
  • Instant and automatic synchronization between end-user license and application
  • Enforcement and reporting capabilities for a seamless compliance process
  • Application usage tracking for improved customer insight and/or generating usage-based license models

Going keyless with a cloud-based software monetization solution is a win-win for ISVs and end users alike. ISVs not only get the IP protection and assured compliance they need, they also gain usage insight that can help automate all aspects of software development and compensation, reducing costs and time to market. Usage insight is equally valuable for users as it tells them how, when and where they’re using their products, and enables them to pay according to consumption. Importantly, it also gives them visibility into when they are in compliance, removing any doubt.

Historically, ISVs have tried to protect their IP and optimize their revenue using product keys that enforce product activation and acceptance of terms and conditions. Going keyless with next-generation cloud-based software monetization solutions provides an even better way for ISVs and users to achieve those objectives, adding value along the way.

Edited by Dominick Sorrentino