Key Takeaway: Licensing as a Service (LaaS) is a cloud-based way for organizations to manage and deliver software licenses quickly and flexibly.
Licensing as a Service (LaaS) gives software vendors key benefits compared to building their own licensing system. This post explains why LaaS has become popular and why it’s a smart choice for software companies.
LaaS enables you to support a wide variety of license models and application types and allows you immediate access to a best-of-breed solution that you pay for either monthly or based on what you use.
License Management as a Service could overcome many, if not all, of the limitations created by more traditional licensing methods such as dongles. It also offers software publishers more flexible and effective means of monetizing their software products quickly and easily.
Software Licensing: The Evolution
To see why LaaS is valuable, it helps to know how software licensing has changed. If you’re already familiar, feel free to skip ahead.
If you are an independent software vendor (ISV) or publisher, you want to earn revenue from your software. The software license sets the rules—how much customers pay, how long they can use it, and which versions they get.
In the past, most software was sold with a perpetual license: customers paid once and could optionally pay annual fees for updates and support. As software moved online, perpetual licenses became less practical. Modern licensing models are now more flexible and better fit different types of software.
To address the limits of traditional licensing and take advantage of the Internet, a new approach has emerged: Licensing as a Service (LaaS).
What Are the Traditional Software Licensing Methods?
The most basic way to license software was through a paper agreement between the vendor and the customer, relying on trust and occasional audits. This method was slow, hard to scale, and easy to abuse, since it was difficult to prevent unauthorized use once the software was distributed.
To solve these issues, vendors introduced digital solutions like license dongles and license servers. Dongles are hardware devices that unlock software, while license servers track how many copies are in use within an organization. However, dongles could be lost or shared, and both dongles and servers required physical setup, making them inconvenient and prone to failure.
Another common method was using software license keys for activation. Only customers with a valid key could use the software. But license keys are also outdated—they’re inconvenient to manage, easy to lose, and add friction for users.
Overall, these traditional methods have significant drawbacks in today’s digital world, leading to the rise of more modern solutions like LaaS.
What Is Licensing as a Service (LaaS)?
Licensing as a Service (LaaS) is a cloud-based way to manage software licensing, similar to how Software as a Service (SaaS) delivers applications online to end-users. With LaaS, companies can outsource license management and enforcement to a provider like 10Duke, eliminating the need to build and maintain their own licensing systems.
This approach saves time and resources, compared to in-house licensing, letting you focus on your core product development. The LaaS provider handles license enforcement, while you set the terms for how your software is used.
LaaS platforms offer familiar SaaS benefits—cloud delivery, global access, flexible billing, and easy web-based configuration—tailored specifically for software licensing. They also support different license models and automate enforcement based on your requirements.
Because LaaS solutions are fully cloud-native, they integrate easily with other cloud tools like CRM, ERP, or e-commerce systems. This creates an automated licensing environment that works in the background.
In short, a LaaS provider gives you a ready-made licensing engine you can configure and launch quickly, without the hassle of building it yourself.
What License Models Are Supported?
One of the big advantages of working with a software licensing specialist is that they will typically support a wide variety of license models. This lets software vendors easily choose the license model that fits their product and customers, such as by user count, price, duration, or location.
While the current trend is to deploy subscription-based license models, not all software products are best sold on a subscription basis and a LaaS provider can facilitate alternative models that enable a software product to be monetized more effectively. This is particularly the case in a business to business context as well as large-scale consumer offerings.
Some examples of licensing models that a typical LaaS provider can offer includes common models such as perpetual and subscription, but also more complex models such as floating licenses, corporate on-demand licenses, offline usage (a license model well-suited for the construction or mining industries), aggregate use time licenses, concurrent usage, and more.
How Do You Work With a Licensing as a Service Provider?
Working with a LaaS provider lets you focus on your software while they handle licensing. You simply integrate your app with their licensing engine, connect to payment platforms like Stripe or FastSpring if needed, and sync customer data with your CRM such as Salesforce or ERP. Once set up, you can roll out the new licensing system to current and new customers with minimal effort.
Unlock 15-35% more license revenue from existing customers
10Duke is a best-in-class licensing as a service provider for fast-growing software businesses.
Improve how you license and monetize your software products.
What Advantages Come From Using a Licensing as a Service Provider?
Access to a best of breed licensing solution that just has to be configured and integrated rather than developed from scratch, saving time and money.
Access to license models that the software vendor may not have thought of or considered for their software product that may help to better monetize it.
Summary
Partnering with a LaaS provider gives software vendors flexible, ready-to-use licensing options without the hassle of building their own licensing system.
LaaS supports multiple license models, scales easily, and replaces outdated methods like dongles. This lets vendors monetize their products faster and more efficiently, with simple monthly or usage-based payments.
10Duke Enterprise is a LaaS solution that helps software vendors monetize their products. If you are looking for a modern software licensing provider or you have any questions, get in touch or book a demo with our experts.
Licensing as a Service, a new method of software licensing, offers flexible and effective means of monetizing software products quickly and easily.