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Licensing and Protection Strategies for Software Publishers

03.13.2009
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When the economy is weak, some software developers lose sales, while others build their businesses. By locking pirates out of your software, you can dramatically increase your chances of weathering economic downturns. Here are some insights into licensing and protecting your software, and keeping your income stream intact.

Now more than ever, organizations must find a way to cut costs and increase their revenue streams, quickly and dramatically, in order to weather the onslaught of this worldwide economic crisis.

Licensing And Protection Are Investments

Analysts and CIOs agree that flexible licensing and intellectual property protection are two of the key strategic investments a software publisher can make in these troubled times. Developers and publishers that use trusted licensing solutions now can "do more with less", turning financial woe into an opportunity to improve company operations, while making an immediate and positive impact on the bottom line.

When economic conditions are strong, we software publishers tend to ignore piracy, for a number of reasons:
  • You're selling an acceptable number of your applications, and your income stream is strong.
  • You reason - correctly - that it's impossible to lock out the dedicated crackers who are as experienced at removing piracy protection as you are at installing it. So, you tend to create superficial copy protection schemes that only block casual and non-technical people from breaking into your software.
  • You'd rather concentrate on your company's core business, and the problems that your software solves. Why waste time on anti-piracy coding when you could be enhancing the basic functionality of your application, or bringing a completely new program to market?
  • You reason that pirates who use keygens and patches wouldn't buy your applications anyway, so it doesn't matter if they use an illegal copy of your software.
When economic conditions weaken, and sales go down, software piracy becomes more of a problem. It's more of an economic problem because, with decreased sales, pirated software represents a higher percentage of your installed base. It becomes more of an psychological problem because when times are rough, it's more and more grating to know that people are using your software without paying for it

Alternative Approaches To Software Licensing

One way to deal with weak economic conditions is to experiment with different license types. When you originally designed your software, you probably built in one form of license, perhaps offering a license for a named user. Or maybe you have built floating licenses into your software, allowing a company to buy, say, a ten-pack and allocate them as they wish.

Your initial software probably didn't support trial versions that are enabled for a variable number of days, or grace periods that can expand the length of the trial period. These, and similar licensing options, could generate additional protection for your software, as well as generate additional revenue. Does your trial version count the number of days, or the number of uses, or both? How does it deal with contiguous days? If you count the number of uses, how do you deal with users who leave their computers running 24/7? Does your program "call home" to activate the product, or to verify that there is a valid license? If you lock a license to a named user, have you allowed for unlocking and reassigning the license? Automatically, and in real-time?

You can always add support for all of these licensing options into your programs. However, retrofitting your software can be time-consuming, and such a protection regimen won't be as effective as a protection scheme that was originally designed into your program.

Flexibility In Your Software Licensing Solutions

Flexibility is a valuable publisher's asset, and you should plan at the outset to be sure that your application can adapt to changing market conditions. With a flexible licensing system, you can market your software more effectively as you change as the market changes. You'll probably want to operate by different rules during tough times versus boom times.

Adaptable licensing will also let you act rapidly when your competitive position changes. If your major competitor retreats during an economic downturn, then your enhanced flexibility lets you respond quickly. Retreating companies leave voids in the market, and some of these niches can become opportunities for the most agile developers.

By being flexible, and offering a wide range of alternatives, you  enhance your opportunities to turn shoppers into buyers. There are  several licensing solution providers in today marketplace, including  our company, jProductivity, LLC. All of them offer a powerful,  flexible solutions that lets software developers and publishers build  in the widest range of licensing strategies and techniques. Such  licensing solutions solves complex licensing challenges where Developers  are able to build and distribute their application with  the peace of mind that the unauthorized use of their applications is  minimized, thereby resulting in the recovery of potentially lost  revenues.

Building Versus Buying Software Protection

Of course, this brings up the "Build versus Buy" decision that publishers wrestle with every day. The main argument for building your own licensing regimen is that it puts you in control. You can design and implement it the way you want. In addition, code that you write yourself is easier to maintain.

The arguments in favor of buying a third-party protection solution such as jProductivity's Protection! Licensing Toolkit are:
  • As with every professional-quality program library or SDK, it costs significantly less to buy a third-party solution than to build it from scratch.
  • Building an in-house solution requires substantial resources, and is a distraction from the strategic direction that you have set for your company. You could be putting this time to better use, by enhancing your existing application, expanding your brand with additional versions of your current software, or developing totally new programs.
  • Copy protection is not your software specialty, and you would benefit by using software that was developed by experts in this niche. Your expertise lies in the software that you offer, and the problems that your software solves. Instead of learning the intricacies of software protection, you can rely upon third-party developers who specialize in locking out pirates.
  • Implementation of a properly designed third-party licensing regimen is simple. Plug it in, and enjoy the benefits immediately.

The Bottom Line On Software Protection

You need to protect your software. Your licensing plan needs to minimize casual "soft piracy" and prevent people from passing your software around to friends, family, and coworkers. And it needs to lock out the serious piracy that involves running key generators and passing around stolen unlock codes. Even if you offer a free application, it is worthwhile to license its use. Licensing freeware lets you keep track of users, and contact them about upgrading to paid versions of your software.

Software protection is not just an idea to consider someday in the future. Protecting your software is crucial to protecting your income stream.

 

About Author

Alexander Krivov is the CEO and Managing Partner of jProductivity, LLC, a New York-based software company founded by experienced system analysts and developers. Since 2004, the company have been making tools and specialized solutions for software developers and software publishers. jProductivity is a developer of the leading multi-platform protection and licensing software solutions. Please visit jProductivity website to learn more about licensing solutions and strategies for software developers and publishers.

Published at DZone with permission of its author, Alexander Krivov.

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)

Comments

Andrew McVeigh replied on Sat, 2009/03/14 - 3:53am

looks good, but the server software is very expensive.  as a small business myself, have you considered an option where people pay based on the number of activations?

Alexander Krivov replied on Mon, 2009/03/16 - 7:30pm in response to: Andrew McVeigh

Hi Andrew, if you referring to my company product Protection! then such option is available. Not out-of-the-box however. Generally such option treated by customers as royalty and not many customers (if any) are happy with any kind of royalty.

if you referred to an article as potential strategy - then I absolutely agree. With flexible licensing solution there a benefit for software publisher to be flexible as well when it comes to revenue models, etc. As I said in the article: Flexibility is a valuable publisher's asset!

Hayden Panettiere replied on Sat, 2009/05/09 - 4:56am

Retreating companies leave voids in the market, and some of these niches can become opportunities for the most agile developers.
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Hayden Panettiere replied on Sat, 2009/05/09 - 4:58am

When you originally designed your software, you probably built in one form of license, perhaps offering a license for a named user.
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