Confused by the term “Software License Management”? You’re not alone.
The term software license management is (unfortunately) used in the software industry to apply to two different types of software solutions. In this article we aim to clarify the difference between the two types of software license managers to help you figure out which solution you might be looking for.
The Two Types of Software License Managers
- A software license manager can be a tool used by software publishers to issue, deliver, monitor and revoke licenses they provide to their customers. For clarity, we’ll refer to this as a “Vendor’s License Manager’. This article will provide a more detailed explanation of the vendor’s license management solution; who is it used by, how it is deployed, how it is charged for, what key features to expect in it, and who the main vendors are in the market.
- A software license manager can also be a tool used by a company which has purchased multiple licenses from different software vendors in order to track usage and for audit purposes, primarily to make sure that they are using the licenses they’ve purchased. For clarity we’ll refer to this as a ‘bought-license” license manager, although in the market it is generally referred to as a “Software Asset Management” (SAM) solution.
A few quick notes on what a SAM solution is and who it’s for.
What is a Software Asset Management solution?
If you are a company that licenses a variety of software products from different companies, keeping track of these licenses can be a tricky problem. If you have too many, then you are likely paying more than you need to be. If you have too few, then you are likely violating your license agreement with the software vendor/publisher.
This is where the Software Asset Management solution comes in. The aim of a SAM solution is to ensure that the actual usage of licenses is tightly aligned with what has actually been licensed and thereby authorized for use. This means that the solution is often referred to as a Software Asset Management (SAM) solution.
For review of the various SAM solutions available and to learn more about the main SAM solution vendors, check out Gartner’s site.
Unfortunately, even good sites like Capterra and Trustradius, for example, stuff the two types of license managers into the same category that they call “License Management Software”.
On Capterra’s Buyer’s Guide license management software is described as:
“License management software helps organizations monitor and control
software use and ensure software license compliance within their own business.”
You may now begin to see where the confusion comes from. The above description only applies to SAM solutions. If you’re not a large enterprise, most likely this is not what you’re looking for.
However, there is the other type of solution.
Vendor’s License Manager (VLM)
If you’re not looking for a SAM solution, then it is likely that you are a software publisher or independent software vendor and you are looking for a solution to help you manage the licenses you sell to your customers.
These licenses lay out the business terms on which your customer is able to access and use the various features and functions of the software you have written.
What does it do?
A Vendor’s License Manager is a software program that allows you to issue, manage, and revoke licenses to your software application(s). These licenses may be commercial or free, but they represent the business rules on which you have decided to allow your customers to access your software application(s).
How is it deployed?
A VLM solution can either be deployed on premise or in the cloud. Different vendors offer either one of the other options, although a couple of vendors are able to support both offline and online usage with the same solution.
How is it charged for?
Different vendors offer different charging models. Some charge as a percentage of your company's revenue. Others charge a percentage of the license revenue your company earns (but not other revenue streams you may have). Still others charge a flat fee, either as one-off or on a recurring basis (typically either monthly or annually).
What are the core features to expect?
Core features in a Vendor’s License Manager include the ability to:
- Issue new licenses
- Edit licenses that have been issued
- Revoke licenses
- Issue licenses to specific features of a product or product combinations
- Support a variety of license models (subscription, floating, term, perpetual, etc)
- Reconcile issued license with CRM or ERP systems
- Integrate with an e-commerce engine or payment provider
- Support channel sales
- Support your customers to be able to manage their own users
- Connect to the License Manager using REST APIs
Licensing APIs
Some of the more modern software license management solutions are offered as cloud-based solutions that can be accessed via APIs. Within these licensing APIs vendor offerings, the key differentiators center around whether the licensing API is a single tenant solution or a multi-tenant solution.
The former tend to be more flexible and customizable for your specific business needs, but they tend to come with a higher price tag. Multi-tenant licensing API offerings tend to be the least expensive in the market but this comes at a cost of offering the lowest common denominator in terms of features and functionality as they are designed for companies with similar requirements.
Who are the main vendors of software license management solutions?
The main vendors in the market are split between the ‘traditional’ key-based solutions provided by Flexera and Reprise and newer, more dynamic solutions provided by 10Duke.
Why should you choose 10Duke as your software license management solution?
10Duke's software license management solution allows you to configure and manage the licenses that you, as the software vendor, provide to your end customers. It is unique as a licensing solution in that it utilises an identity-based licensing approach, in which an end-user logs into an application and then the license grant is made to that individual. 10Duke is the only provider in the market that offers both a software license management solution and a full-scale customer identity management.
The 10Duke solution is made up of three distinct APIs - an identity provider that takes care of authentication, and Entitlement API that is concerned with licensing and Event Data API which is concerned with analytics and recording usage information.
This unique approach creates a very flexible and scalable solution that is fast disrupting the license management market. 10Duke supports a wide variety of license models including floating, subscription, perpetual as well as more exotic models such as consumption based models (see all supported license models here). It supports both offline and online licensing scenarios and is quick to integrate and deploy. It can also be configured to work with other business systems like CRM or ERP tools that a business might be using.
Learn The Basics of 10Duke Software Licensing
Conclusion
Software License Management is a term used to describe two different use cases. Some people use it to refer to software asset management (SAM) solutions that are used to manage licenses that you, as a company, may have purchased from a variety of software vendors. This helps you to comply with license terms and optimize your license usage.
In contrast, software license management is also used to refer to a solution used by software publishers or independent software vendors (ISVs) to configure and control the license to their software application that they sell and grant to their customers. This is perhaps most clearly referred to as a “Vendor’s License Management Solution”.
Depending on your requirements, it will save you a lot of time and effort to be clear on what type of solution you are looking for before you start contacting potential vendors. We hope this article will help you determine what type of solution you’re looking for!
Learn more about the 10Duke software license management solution.
Are you a software developer looking to sell more? Learn more from our guides:
Should You Build Your Own Licensing System or Buy It From a Specialist?
Software Monetization Guide – How to Monetize Software?
Software Licensing Guide – Why is it so important?
Why Software Companies Should Consider the Subscription Business Model
What is a Software License Manager? [Guide]
Software Licensing Solutions – Guide
Software Licensing Models – Ultimate Guide to Software License Types
Customer Identity and Access Management – What should a good CIAM solution provide?
