Learn the basics of Software Licensing agreements: what they are, why are they important, and what you should include in your Software Licensing Agreements.
What do you call a company that allows you to license software?
You might be wondering whether the company that created your favorite desktop or mobile app also developed the mechanism to issue and validate licenses for their end users. Although sometimes these companies (like Microsoft or Adobe) might have created their own in house licensing solution, most companies opt to focus on building their own product, and select a 3rd party outside vendor to rely on. What what is this type of company called you might ask?
The answer is: A Software License Management Company! Well, probably. A License Manager can actually refer to 2 different things: either an SAM or an SMLS, more on the distinction between the two definitions here.
What is a Software License Manager?
A software License Management company provides a solution to issue and manage licenses so that the software vendor does not have to build such a solution themselves, and can focus on developing key components of their software, which could represent a significant time to do, without really providing any real value to the vendor. A Software license manager plays a key part in implementing an effective software monetization strategy.
What sorts of software licensing mechanisms are popular on the market today?
There are lots of license enforcement schemes on the market today. Some companies ship a Dongle with their software, which needs to be plugged in to the device on which the software is running for it to validate. This mechanism is typically reserved for expensive software, or software that runs on private networks with no access to the internet. Dongles tend to be a bit tedious as they can get lost or damaged. We do not offer this hardware token solution and opted for a software-only approach to Node-Locking Licenses to devices.
More often, there is some API that allows the client application to connect to a server and verify that a license is valid before allowing the software to run. There are many self-hosted solutions for this. A popular approach today is to select a cloud Licensing provider so that the software vendor does not even need to worry about their servers. You can fine more details about the pros and cons to opting for a License-as-a-service and a self-hosted license server. At LicenseSpring, we offer both options.