Innovative use of licensing for SaaS companies

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Innovative use of licensing for SaaS companies

By Jon Gillespie-Brown | June 4, 2008

How to effectively license your software using short term payment subscriptions (SaaS) using the Nalpeiron Licensing Service (NLS).

Account Manager for Nalpeiron, Lee Evans, has been working with several very interesting major projects that involve the hybrid use of licensing controls and SaaS i.e. client and server side license controls.

One for a multi-million installation rollout to cell phones for GPS usage and another is for stock trading.

The benefits of this hybrid approach allow clients to retroactively switch off non-paying end users or even downgrade functionality while awaiting payment.

This is a great incentive for users to keep paying for SaaS fees and also offers another exciting business model option for our customers.

Introduction:

The NLS requires that an end user only connects to our Activation Server during initial Activations, or during temporary License Return if they are moving the license to a different computer. It has been designed this way so it is not intrusive for the end user and does not rely on a permanent Internet connection.

You can now use the NLS in such a way that you can ‘turn off’ or limit the functionality of your application on an end users machine, remotely.

Method:

In order to achieve this, the license itself needs to be returned back to the Activation Server temporarily so that changes can be made. It can then be re-activated by the end user for the changes to take place. This is in the case that you WANT to restrict their license. If not, however, then simply allow their license to re-activate un-altered.

But how can I force my users to perform this license return every 30 days or so?:

You build this into your application. This is how:-

- Have your application perform ReturnLicense() at fixed dates throughout the calendar, or every X days.

- 5 seconds after ReturnLicense() happens, have your application perform InternetActivate() taking the license code from the .txt file in the application directory

This means you now have a way to force the License to return to the server, then to re-activate automatically.

So how do I make the changes when the license comes back?:

You can do this manually – although you’d have to be very quick! – or you can use our web-services. You program your e-commerce or CRM system to instruct whether or not the end user has paid during that month. If they have paid, then take no action and let the application re-activate itself. However if they have NOT paid, then you can either edit the license code to turn off some modules/features, or you can mark the License Code as Inactive entirely and prevent it being re-activated.

These two options offer either a lenient approach i.e. restricted functionality, or a no-tolerance approach.

If you wanted to you could even combine the two methods and have the product restrict features if no payment initially, but if there is no payment within X days then next time the deactivate/reactivate happens you could use web-services to mark the License Code as Inactive.

OK, so what if my user is not connected to the Internet during this process?

If this is the case then the process cannot happen. Again, you have some choices. You could:-

- Show an error on the date the deactivate/reactivate is supposed to happen and stop the application from running, or

- Build in a checking system to make sure this process happens the next time they run the application

Great, how do I do that?:

There are a number of methods with different advantages, but one example would be as follows, assuming that the return process happens monthly:

- Use the Custom Data Field to store the number of times the deactivate/reactivate process happens

- Each time the process happens, increment the CDF by 1

- Use logic within your application that means: IF return value for CDF is LESS THAN number of months license has been running, THEN perform ReturnLicense() and InternetActivate().

Summary:

Using this method you can now achieve SaaS with much greater control over the end users. This process does not have to be intrusive for the end user as the process will only take a few seconds. Of course for the users who have not been up to date with payments, you can have optional warning screens to ask them to call your support or sales teams. Again, this is entirely your decision on how to implement.

This method will require knowledge of the Nalpeiron web-services and further documentation about these can be found at www.nalpeiron.com