Outdated license key systems

A software licensing provider like FlexNet LM has offered value to software vendors in the past. A group of networked computers could access and run the same software using a single license file, therefore, enabling software licensing models like floating licensing to be deployed.

Typically software license keys issued using a license server are deployed by a third party software licensing provider that sits between you as the ISV and your customer. Enforcing this method requires license servers and IT infrastructure to be installed and deployed at each end user's location. The server can also be set-up with multiple license files, so for example license file A issues licenses relating to software function A and license file B issues licenses for software function B and so on. This enables multiple features to be licensed from the same product.

When your software runs it usually picks up and sends a hardware ID to a server hosted internally at your customer's location. This internal network server then requests a license key from the stored license file and combines this information with the hardware ID to produce a digitally signed message which, when sent back to the software enables it to run. A license management system inside the server issues the licenses and a Vendor Daemon tracks how many licenses have been issued and who has those licenses.

In order to request and validate a license file, you must collect and co-ordinate license server information – copy and send a license file between server software, request and copy the corresponding hardware license information, confirm its accuracy and then this combined license key must communicate with your registered program for it to run on the end device.

Revoking licenses, monitoring access and software license reconciliation becomes a significant issue unless you and your customer have an unlimited budget and unlimited personnel. Poorly maintained servers are also notorious for working fine one day and suddenly failing the next. Also if the Vendor Daemon stops, users can lose access to their licenses, sometimes without warning, therefore losing work.

A server software licensing provider does not solve the problem of effective license management. Organisations will still have to dedicate a lot of resource to software license reconciliation and undergo lengthy and expensive audit processes. Customers lose track of their end-users as people move through or leave organisations and pushing updates and tracking software overuse can still be very cumbersome and time-consuming. In today's world of BYOD and the evolution of remote working environments, it's very easy to lose track of exactly who needs access to software products and who actually has access. End-user environments are not always tightly defined by a single local area network, as a result enforcing license server models can become overly complicated.