Blog Entry

Apr 8
2010 

In Defense of Dongles

It’s not surprising that within the circle of licensing system vendors, one of the topics that comes up time and again is whether hardware-based (dongle) or software-based licensing is better.  At SafeNet, we don’t understand the question.  We provide the best-in-class solutions as all software, all hardware, or uniquely, as a hybrid licensing solution.

The list of pro’s and con’s regarding one solution over another is meaningless without understanding the context in which the solution is to be applied.  I’ll try to correct the misinformation that’s out there about dongles.  You can judge for yourself if you think I am biased, but since we offer every flavor of solution (dongle or soft), I don’t have anything to gain in this fight.

Myth: Software Licensing is as secure as Hardware Licensing

This is the most egregious misinformation out there.  Anyone who tells you that their soft licensing system is as secure as a dongle is either misinformed or not in a position to offer you a dongle,  Software-only based licensing has many, many advantages (and represents a healthy and growing part of our business) – but it’s still software.  And as a piece of software, no matter how much “security” anybody bakes in there, it can be copied and moved as easily as music or movies or games are.  Security is a complicated animal  with many dimensions, but if security is your most important criteria, then dongles, a full API integration and staying current with our technology is the only way to go.

Myth: If someone is using a Dongle, it’s to prevent piracy

Not true, at least not always true.  Did you know that the majority of dongles we ship (and we ship the majority of dongles) don’t accompany software applications as you and I know them.  They accompany network appliances, manufacturing systems, industrial machines, entertainment systems and medical devices, not software.  Why?  Well, because these companies build and ship hardware, and “dongles” are simply the most convenient, easy and reliable solution from pretty much any angle,including financially.

(Just a side note: high tech hardware companies like the ones I describe using our products are really software companies.  Add up all their software engineers and divide by the number of software AND hardware engineers, and see what you conclude.)

Dongles are More Expensive than Software Licensing

Errrr, wrong again.  The first thing to note is that most dongle companies do not charge for any of the software that accompanies the actual dongle .  You get all the licensing technology, reverse engineering and security protection and support whether you buy 1 dongle or a million.  That’s an awful lot of software for very little money.  Actually it’s a perfect pricing policy that scales exactly to your needs.

The “software-only solution” guys can’t compete with this, so their only option is to sign you up to a multi-year subscription based on a percentage of your revenues, the platforms you use, etc.  To be fair, SafeNet offers that model too, and a lot of people like it but it’s not for everyone.

That’s why SafeNet does all three of these things that no one else does:

  1. Per Seat.  We let you buy “soft licenses” on a per seat basis.  No subscription, no commitment, no dongles!!! Buy one soft license, buy a million – its up to you.  The perfect pricing plan with no commitment.
  2. Hybrid Approach.  Buy dongles on a split software subscription / lower price hardware plan.  At SafeNet, we offer this option.  Customers can sign up for an annual subscription based on revenues and size, and then buy dongles at a fraction of the list price.Most of the value in our dongle product line is really tied up in the software, and this is a model that works for 6,000 customers.  We added this plan to allow customers to budget the majority of their expense against capex and take a much lower opex cost on the actual dongle.  It makes economic sense if your volumes are relatively large.
  3. Enterprise Agreement.  Get access to any of our technology on a single subscription plan, regardless of the form factor you need for your company.  If soft licensing makes sense for one portfolio and hardware licensing makes sense for another portfolio, we’ve got you covered.

We should always consider all sides of the “expense equation”.  Dongles are physical things.  You can count them.  You know how many you had at the beginning of the month and how many you have at the end of the month.  Simple math tells you how many you have shipped.  Software licensing systems don’t exist physically, so you need software to manage and count and distribute the licenses.  That software (sometimes called “Entitlement Management” systems) does not come free.