Got Questions about Date-Based Licensing? We’ve Got Answers

April 08, 2021

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If you’re looking for a new way to draw revenue streams from your software development efforts, the array of possible licensing schemes is worth a look.

To start, licensing rather than selling applications, comes with many advantages. These advantages include an increase in your product’s value and a long-term, dependable revenue stream for your company. Both you and your users will appreciate enhanced security features that thwart potential software pirates, hackers, and illicit users.

In the world of software security, it’s essential to identify and put into place a licensing solution that is not only affordable and effective, but will save you time and money. That’s why date-based licensing is becoming a valuable aspect of software security.

What is date-based licensing?

For decades, developers sold software for a single payment that granted the user unlimited access. But now, software is usually licensed as opposed to being sold. One payment grants access to the software for a given length of time, and when the end of that term arrives, either another payment is collected to extend it, or the software stops working. Instead of trading the software for a one large lump-sum, the developer can implement a series of consistent, evenly spaced payments for its use at a much more affordable cost.

As a software developer, you should know that licensing your software through an expiration date, not selling it, offers you the opportunity to continue benefiting from your work just as your customers do.

Why should I implement date-based licensing?

The structure of date-based licensing offers you all of the perks you hope for as a software developer. But at the same time, your product’s users can enjoy advantages they wouldn’t get if you were simply selling it. Here are just a few examples.

Benefits for the developer

• With each licensing period, users must pay an additional fee, creating a revenue stream for your company that can last for years. Satisfied users won’t mind the recurring payment because they’ll appreciate the superior user experience and understand the value you’re providing.

• You gain more control over the usage of your software. You get to determine how long the licensing period will be and the extent of the user’s access.

• It protects your intellectual property from piracy and illicit use, ensuring you’re fairly compensated for your time, effort, and investment.

Benefits for users

• Date-based licensing allows customers to avoid a large one-time capital expenditure in favor of lower monthly payments, which increases the initial affordability of your software.

• It releases the user from the responsibility that comes with ownership. Similar to renting a tool, if something goes wrong, maintenance is needed, or a newer model is released. The user isn’t on the hook to replace the product. They can turn to you for help.

• You’re invested in the ongoing success of your product because dissatisfied customers won’t renew their licenses. Therefore, your customers will enjoy attentive customer support and regular product updates from a company that wants to help them succeed.

How does date-based licensing work?

When you choose to implement date-based licensing, it will be enforced through a dongle. The expiration date is programmed to this hardware key before it leaves your door. The dongle works by comparing the system clock, to the preprogrammed expiration date to determine whether the license has expired.

In its most simple form, these are the functions the dongle carries out to enforce the terms you’ve set:

1. When your client receives the physical key, it will then call to the system clock or the on-board real-time clock (RTC) and store the initial date the software was run. This date becomes the beginning “lease date.”

2. Each day thereafter, when the program or application starts, the key will check to ensure that the current day is greater than the lease date.

3. Along with the lease date, the dongle will verify that the current day is one or more values greater than the previous date of use and does not exceed the expiration date.

If all checks are successful, then the application can run. If not, then the application will be denied, and access will be prevented until you receive payment and renew the license. Your customer will have full access to the application until the expiration date is reached. At that point, they can pay you to extend the license or give up access to the application.

What is a real-time clock (RTC)?

A real-time clock is an extra layer of security, the cherry on top if you will. It is an external clock, outside of your end-user’s main operating system, with its own power source or battery. The RTC provides the most reliable source between the absolute time and current time because, unlike the system clock, it runs constantly—even when the main operating system is in low-power mode or shut off entirely.

Since they require very little power, real-time clocks last years, and in many cases, RTC batteries are rechargeable to ensure lifelong protection. With an RTC on your side, you can be certain your software will remain secure and accessible to those who have met the proper criteria.

By setting up your application to rely on an outside source for software accessibility and functions, you eliminate the need to rely on the system clock, which can be easily manipulated by malicious or dishonest end-users. At Keylok, we recommend that developers who implement date-based licensing also utilize dongles with real-time clock features. This approach keeps your end-users from circumventing their own devices to prolong their access to the licensed application. Beyond that, it creates an extra layer of security to prevent software pirates and hackers from gaining unauthorized access to your software.

With date-based licensing, you open your company to a new realm of revenue and growth opportunities as well as take your product’s security to the next level. This simple method of licensing over a predetermined period empowers you to maintain full control of your application and offer a valuable product to your customers that evokes their confidence in your application.