KEYnote 33 English - Spring 2017 - Page 7

When a subscription is ordered , the billing system sends the necessary information to CodeMeter License Central . The order has to include details about the products covered by the subscription , the original purchase number , and the next payment date . CodeMeter License Central then produces a ticket with the required temporary license , with which the user activates the subscription . The ticket is stored in the license or on the user ’ s computer . specific market and the specific product . How many more users would I be able to reach that I would not reach otherwise ? In this scenario , the success of the model would be visible quite soon – if I cannot reach more clients with a subscription model , it would mean less turnover overall compared to outright sales .
The above chart shows the typical development of sales revenue for outright purchases , maintenance subscriptions , and license subscriptions .
The picture might be completely different for your specific software , but the general rule is that a license subscription is slower out of the blocks , but will then outpace the other options going forward . In many cases , the model should initially be used for specific - ideally new products - or specific markets .
Implementing subscriptions There are two basic ways to set up subscription licenses :
1 . You create unlimited licenses and cancel them when the subscription ends .
2 . You create limited licenses that are active until the next payment date ( plus a grace period ) and renew them automatically when payment has been received .
The first approach makes for simpler handling , as it only needs one action in the case of a cancellation . However , it does leave considerable room for fraud : Dishonest users could try to keep their licenses active by either not going through the cancellation process or by interrupting that process by not going online . This is why the second approach is preferable . The common objection that it forces users to get active regularly to renew their licenses is easily explained away : Simply use an automatic renewal process , ideally with a certain grace period . For most users , this will let the renewal just happen automatically and in the background . Another advantage of the second option is how simple it makes it for the subscription to be transferred to a new computer . Since the license on the old machine is time-limited , it will simply run its course , and you can show goodwill and allow the user to activate the new one on the new machine in the meantime .
Technical workflow In order to introduce a subscription model , you need CodeMeter License Central to create and automatically deliver the licenses , and you need a billing system . This can be a popular ERP system like SAP , an e-commerce solution like CleverBridge or Digital River , or a CRM system like Salesforce .
For an automatic renewal of the subscription , the billing system transmits again details about the products , the new purchase number , the next payment date , and the original purchase number . CodeMeter License Central uses the latter number to allocate the renewal to the right subscription and produces a license with a new expiry date , which is set to the existing ticket .
The user ’ s software uses the ticket it has stored and checks regularly whether a license renewal is available . If it is , the license is automatically updated . Within a certain grace period , in which the license stays active beyond the next payment date , the whole procedure can run transparently in the background , without ever interrupting the user in his daily life with the software .