What is a Software License Key and Why it is Important

What is a software license key and why is it important? 

Anyone who uses software, knows how important it is to regulate its use and make sure it is being used appropriately for the price paid. As opposed to a license itself, which gives a user (or users) permission to legally use a piece of software, a license key is a code or token that allows the user to identify him/herself as a legal customer (aka a paying one). 

In this piece we’ll look at what license keys are, what they are used for, the different types of license keys, why they are important, best practices, and more. 
 

What is a license key for software?

A software license key is a way to make sure that only the correct users are able to install and/or use software (after a license has been purchased). The key can be a list of characters or numbers that the user must enter when first opening the software or in certain cases a hardware dongle that is connected to the computer. While the hardware dongle may be less convenient for some, it is easier to protect (as it can’t be copied). Another benefit of a dongle is that it doesn’t require internet to be used.

It is important to differentiate between the license key and the license itself. When a person or company purchases software, they must purchase the correct licensing scheme for their needs. Different kinds of software may provide different kids of licenses according to number of users, company needs (aka do they need an ongoing subscription, a one-time purchase, or different things for different people within the company), type of software and more. Once the license has been dealt with, the purchaser can receive download the license key (or receive the dongle) in order to install and use the software properly. In the long run, companies protect software with license keys. 

Where do I find my software license key?

How to get a license key depends on the software and the way that you’ve purchased it. If you’ve purchased a physical copy of a product (for example Microsoft Windows), your software key should be in the box. If a product has been preinstalled on a computer or device, the software key should be listed on a sticker or somewhere prominent in the packaging. 

When using SaaS software and other software that is downloaded straight to a device, you should be able to perform a license key download after purchasing. The software license key generator will create a unique license key for each user to enter before using the software for the first time, confirming that they are allowed to legally use the software.

How does a software license key work?

Once a user downloads or has access to software, a license key is used to unlock the product, therefore, providing access to those who have legally accessed it. This is done through the string of numbers or letters or through a dongle/USB connected directly to the computer. Once the software vendor confirms that the software key is correct (and hasn’t been used improperly by others), the user will have access to the desired software (this process is usually immediate)

Why is a license key important?

Back in the day, before SaaS and digital products were so commonplace, there was much less a need for software license keys. This is because people typically bought a piece of software that came with an activation code and that was that. As the digital age advanced, software piracy become more and more of an issue, with people illegally copying software. This is when software license keys became critical. 

To put it simply: license keys protect software and software creators to guarantee that software isn’t being used improperly without a license. A product that doesn’t use a license key as part of the activation process, will be subject to illegal use, impacting the company’s profits. 

How to create a license key for software

Software companies today need to plan in advance in terms of how they will create a license key for their software. This includes the software license activation key process as well as distributing the keys to paying customers. 

In order to use software keys effectively, software companies, as well as corporate end-users, must plan for software license key management. This is often done through a software license key management system.

A software key management system is critical for any business that uses a variety of software tools for everyday operations. A management system allows you to keep track of license keys across users, departments, and even different companies if necessary so that if you need them to reinstall or change the software in the future they are easily accessible. Software key management systems give companies the tools to deal with all of their licensing needs including license management, proof of purchases and invoices, and other details related to the various pieces of software they hold.

Software companies will need to keep the software keys that they generate and distribute organized, in order to ensure that none are used twice and that no duplicates are generated. 

Thales: Your solution for software license keys

With Thales, you’ll be able to manage your software licenses as well as software license keys with easy, flexibility, and control. Our software license key management system,  Sentinel HL and CL, is one of the tools that can help you cover your business model, track your licenses and keys, and more, using our out-of-the-box or custom-built models.  Check out Sentinel HL and Sentinel CL today for endless options for software license keys.

If you’re looking for a software license solution that includes issuing dongles to your users, Thales provides a solution for that as well. Our license dongles provide top-notch security to your software while remaining easy to use for your customers.

Want to learn more about Thales solutions for software license keys?