Many software vendors already understand the role of software licensing in the successful growth of their business, and a license server, which checks, controls and measures software usage, is a vital component to scalable software sales.
Modern licensing engines can leverage cloud-based technology to service today’s sophisticated online digital environments, however, currently, many software license solutions are still primarily deployed as ‘on-premises’ software, and are typically called Local License Servers (LLS).
This article aims to highlight some of the pain points associated with using an LLS but also those use cases where they still serve an important function.
What Is a Software License Server?
A software license server is a centralised computer application that services software access requests from end-client computers. The license server checks the number of copies of a software programme that an organisation is permitted to use and controls access through the provision (or denial) of ‘access tokens’ or ‘keys’. For this reason, the term ‘key server’ is often used interchangeably with the term ‘software license server’.
Do I Need a License Server?
For many ISVs, monitoring multiple software licenses represents a huge challenge. Manually deploying and maintaining a record of access tokens can quickly become a headache, and it is very easy to lose track of who can and should be using specific software applications.
However, violating a software license agreement can carry criminal charges for your clients, not to mention the impact of unauthorized software usage on your bottom line.
ISVs that use a licensing server to centralise software license management not only achieve greater license compliance, but also, when done correctly, a license server can significantly reduce the cost of deploying and managing new software licenses.
License management servers can be deployed from the cloud and licence servers can also be deployed on-premise, within the network of your customer.
When to use a Local License Server
Setting up a Local Licence Server involves installing license server software on a designated computer within your customer’s environment. The server manages license requests from client applications, granting or denying access based on entitlements tracked in license files.
This is typically done for two reasons:
1) the end customer isn’t willing to have the licence server to which their client applications connect hosted in the cloud, or
2) they operate in an air-gapped network so that it is not physically possible for their clients to make calls outside of that network.
Drawbacks of On-Premises License Servers
The challenge with Local Licence Servers is that they add cost and complexity, requiring ongoing maintenance, hardware management, and IT support and this typically falls on your customer.
They are prone to downtime if the server fails, can be difficult to support across multiple locations, and often require manual intervention for updates or troubleshooting, leading to potential disruptions. This might reflect badly on you, the software vendor, but your ability to manage that LLS lies with your customer.
Cloud-based Software Licensing with 10Duke
The shift to cloud-based licensing, pioneered by companies like 10Duke, transformed software licensing for ISVs by enabling automatic license compliance and distribution – something LLS can't match.
In an era where B2B software sales are increasingly competitive and customers expect simple online access, leading vendors gain a critical edge by adopting digital-first, cloud-based licensing models.
The 10Duke licensing engine provides all of the functionality of an on-premises license server, (including managing dark sites or air gapped networks), combined with the convenience of online connectivity.
You get highly configurable, reliable and stable software licensing, with the added benefits of:
- Fewer ticket requests for your clients IT department, therefore reducing costs and streamlining resources
- Fewer ticket requests for you, the ISV, by eliminating support calls about a component that isn’t even yours
- Fewer ticket requests for you, the ISV, by providing your customers with the ability to self-manage their own teams and licenses
- Effortless onboarding of new clients anywhere in the world, without shipping a single item of physical hardware
- Hassle-free, frictionless software licensing for your clients, with instant onboarding of new end-users
- Real-time data about the usage of an application
- Real-time license monitoring
- Alerts for over and under-used licensing by tracking revenue recognition against software usage
- Opening up your business to the needs of your customers and the industry
- A centralised user-experience, even if you are selling more than one software product
A Time and a Place
Local Licence Servers can still have a role to play as part of your overall licensing solution and can help to address two main challenges.
The first of these is when your end customer is working in an air-gapped environment and they need to be able to use floating licenses.
The second is when your end customer needs to use floating licenses, or licenses that are reassigned or reallocated with reasonable frequency, even if they are not fully air-gapped.
In these scenarios the LLS is the way to go and can provide both you and them with a solution that helps them work flexibly but also provides you the vendor with the assurance that the customer is only working with the licenses that you’ve granted to them.
Conclusion
10Duke’s cloud-based software licensing solution empowers ISVs to deliver flexible, scalable, and hassle-free software licensing, eliminating the burdens of traditional Local Licence Servers. However, if they can’t be avoided due to the use cases of your customers, a Local Licence Server might be the right tool for the job – but just be aware it comes with some additional work for both you as the vendor and for your customer.
To discuss what would work for you, book a demo with our licensing experts, or send us a message through the contact form.
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Are you a software developer looking to sell more? Learn more from our guides:
Should You Outsource a Licensing System?
How to Monetize Software Products?
