In the world of software licensing, the dongle was once the solution of choice, but no longer

Today’s ISVs require flexible licensing solutions that can help them introduce new licensing models, products and features faster and more easily. The licensing dongle is not obsolete (yet), but it’s rapidly overtaken by a more versatile solution that can’t be cracked or misplaced: licensing as a service.

Dongles have had a long and potted history as ISVs started to struggle when their usage became widespread.

What is a license dongle?

Dongles (known as a license dongles or keys) are electronic / hardware-based protection locks initially introduced by independent software vendors (ISVs) to protect and prevent unauthorized usage or unwanted distribution of their high-value desktop software applications. The connection was initially done through parallel ports but now it’s more commonly done through USB ports. The dongle contains the license details for a particular version of an application.

How are dongles used in software licensing?

The dongle’s firmware is integrated with the software of the application and contains information used to authorize access — what and how can the end-user use the software. Whether it’s time, location, or limiting the packages / features available, the end-user’s access is controlled by the dongle. The user can get access to the software application only if the dongle is physically present on the computer.

The dongle was once the solution of choice for software licensing, but no longer.

So what are the drawbacks of using licensing dongles?

It’s not unusual to still encounter ISVs in specialized domains like GIS, Image Processing or Medical that still use dongles, but this is increasingly rare.

Dongles have had a long and potted history as ISVs started to struggle when their usage became widespread. A few of the factors contributing to their increasing unpopularity are:

  • Increasing operational costs (device cost, storage & delivery costs to name a few)
  • Dongles are getting lost and are prone to damage (aka ‘dodgy dongle’)
  • Replacements incur extra costs, becoming a turn-off for the customer
  • Some dongles have compatibility problems to certain environment such as different OS or different network configurations
  • Dongles can be passed on from one user to another
  • Hardware cloning was/is also a threat to traditional dongles

Adopting a modern licensing solution should be a no-brainer, but many businesses resist change.

Identity-based licensing is one very apt solution that ISVs should consider; it’s a method of controlling access to digital products based on the authenticated identity of an individual while also retaining flexibility in terms of licensing a product to him/her based on a number of constraints such as company, device, location and application type.

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