Frost & Sullivan
Frost & Sullivan
Best Practices in Software Monetization
SOFTWARE IS MONETIZED THROUGH LICENSING
Worldwide, 42 percent
From enterprise productivity to industrial production, smartphones to smart grids, and music
of software used in
to media, software powers nearly every aspect of our daily lives. Unlike physical goods, which
2011 3
are sold or traded, software is licensed to customers under a variety of business models. These
Software Is Monetized Through Licensing........................................................................... was unlicensed.
Software Is Monetized Through Licensing........................................................................... 3
—Business
range from simple, single-user perpetual licenses to highly complex models based on duration,
Licensing Mustof concurrent users, and other similar factors. As cloud deployment
Resist Hacking to Be Effective.................................................................... 3 Alliance
Software
features enabled, number
Licensing Must Resist Hacking to Be Effective.................................................................... 3
grows, business models based on virtualized execution and actual usage of software are also
Core Characteristics of an Effective License Management Solution................................ 4
increasing. The basis for these licensing models needs to be developed into the product itself,
Core Characteristics of an Effective License Management Solution................................ 4
and maintained or modified through subsequent product upgrades. Server-side infrastructure.................... 5
Considerations in Choosing a License Management Security Architecture
Considerations in Choosing keep track of those that Security and correlate
is required to issue and deliver licenses, a License Managementare issued, Architecture .................... 5
them to Solutionorders where appropriate. As bring .............................................................................. 7
purchase Brief: Wibu-Systems in Action your own device (BYOD) continues to
Solution Brief: Wibu-Systems in Action .............................................................................. 7
be embraced by enterprises, independent software vendors (ISVs) are challenged to provide
Key Takeaway: How to Choose a License Management Solution ...................................... 10
applications and manage their licenses in even License Management Solution fragmented
Key Takeaway: How to Choose a more personalized and technically ...................................... 10
ways. This, in turn, results in growing demand for flexible, scalable and adaptable license
About Frost & Sullivan .......................................................................................................... 11
About Frost & all cases, .......................................................................................................... 11
management solutions. In Sullivan vendors need to support customers and deploy fixes in
instances where software activation malfunctions or interferes with productivity.
It is easy to see that developing and maintaining the solution that issues and manages these
licenses and business rules can become a complex, formidable engineering challenge in its
own right. Software License Management solutions provide efficient tools and processes to
implement, issue and enforce the usage rules or licensing terms associated with a particular
software installation or software-powered device. The ultimate goal is to ensure that products
are used only as authorized, such that vendors can be assured of being fully compensated for
their intellectual property and the use of their products.
In the industrial
sector, 2 in 3 members
of the VDMA (the
German Engineering
Federation) have
already experienced
product piracy and/or
counterfeiting.
LICENSING MUST RESIST HACKING TO BE EFFECTIVE
While theoretically simple, controlling the dissemination of easily replicated digital bits and
bytes is, in practice, a very hard problem to solve. An application becoming a target of attack is
simply a matter of time, particularly if it offers premium and unique features. At that point, the
security of both the application and the system that it runs on becomes critical. All too easily,
applications can be hacked to tamper with unprotected software routines, disable insecure
license management, and extract proprietary portions of code to build counterfeit products.
Indeed, piracy is the single biggest challenge that publishers are facing today, and tackling it
effectively is hard. As a result, there is a prevalent mindset in the industry that piracy cannot
be solved or controlled, and that the best a publisher can hope for is “keeping honest users
honest” and achieving a basic speed bump against casual piracy. This simplified use case is often
referred to as entitlement management. While all license management solutions on the market
compete on enabling features, few invest in anti-hacker resilience as a core, differentiating
feature. This further compounds an already challenging situation for software vendors.
The truth is that piracy hurts a publisher’s bottom line. Ensuring that software is made resilient
against piracy and tampering is just as important, if not more so, as ensuring that legitimate
users can easily and transparently utilize their software in the manner it was purchased and
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