Is the Dongle Dead?

In today’s ISV world, a flexible software licensing strategy is the key to successful monetization and profitability. In the past, secure hardware-based license dongles were the platform of choice for the ultimate in software protection against unauthorized usage or illegal tampering of high-end proprietary applications. Today, along with the trend towards subscription licensing and software-as-a-service in many business arenas, end users are becoming more comfortable with software-based license activations or with cloud licensing implementations. Still, dongles (aka hardware-based license containers) remain at the top of the curve in software protection both in terms of performance and sales volumes. Wherever the ISV finds himself in the global transformation, it is incumbent upon him to work with a licensing solution provider who is capable of offering license containers that easily interface with the same licensing platform and leave the final choice to the end user. So where does that leave the hardware-based license dongle?

Based on our past and most recent experiences, dongles are still prevalent in the licensing mix as many ISVs are reticent to give up on the strengths of hardware-based licensing and their customers still ask them for the associated benefits, like a portable license. Not all of our customers are interested in implementing cloud or flexible software-based activation solutions and, while they may be pursuing these licensing options in the long term, many ISVs still see the value of secure hardware dongles for the same reasons they started using dongles in the first place.

Several years ago, we surveyed our customers and found these main reasons why they preferred dongles as their security method and they still hold true today:

• License Portability – The license is on the dongle and is easily moved from one system to another.
• License Recovery – The end user can self-restore a license to an existing or replacement dongle.
• License Borrowing – Licenses can be lent out (to travelling engineers and salespeople, for example)
• License Redundancy – Important in “Mission Critical” applications (Ex: Hot and Cold Stand-by licenses).
• License Security – Prevents employees or others to use software illegally, even if it is unintentional.

More recently, dongles have been made available with flash memory options and smart card chips that vastly increase the robust security functionality. The built-in flash memory can be accessed like any disk and includes data partitions in different sizes. Dongles are now also available in many different form factors to meet specific industry needs, such as microSD and Compact Flash cards designed for use in industrial equipment and controllers that can perform in harsh embedded environments. In our CodeMeter dongles, for example, we build in a full complement of security functionality, including symmetric and asymmetric encryption, encrypted signatures and the storage of X.509 certificates.

CodeMeter dongles also offer an interesting feature in that they are multivendor-capable. This means each dongle can store licenses from different vendors in separate areas. Thus, the user needs only a single dongle to manage multiple vendors’ licenses. This is particularly attractive to suppliers of plug-ins and extensions. Larger license storage volume, driverless installation, secure offline license transfer, and firmware updates in the field, and additional mass storage via flash memory are other reasons why many ISVs are sticking with dongles.

If you are considering dongles as a licensing option for your applications, I invite you to view our pre-recorded Webinar, The Dongle is Dead – Long Live the Dongle, where we will take a deeper look into the inner workings of CmDongles as well as alternative licensing strategies. Even if you can’t make the live event, register anyway and we’ll send you access to the recorded version that you can watch on-demand at your convenience. Also, if you want to dig deeper into the advantages and specifications of secure license dongles, download our whitepaper, CmDongle with Flash Memory in Practice, and you will learn more about security functions and several specific use cases across a variety of industries.