How to implement subscription and pay-per-use licensing with dongles

Subscription and pay-per-use licensing models are becoming increasingly popular. They are attractive to customers, who only pay for software or services that they actively use, and they are popular with software vendors because they provide opportunities to fully monetise software.

What are these licensing models?

Customers are now familiar with the subscription or rental model from the popularity of streaming services like Netflix and Spotify and the ubiquity of enterprise software such as Microsoft 365. Typically, using these models a customer will always receive the latest software updates, rather than having to pay to upgrade to a new version. The customer benefits from the latest features, fixes and security updates, and the vendor benefits from reduced support costs without multiple versions to maintain.

Pay-per-use software allows the software vendor to charge for their software according to how much it is used by the customer. For example, the number of times a calculation is performed or a report is produced by the software. A major benefit to vendors that use this model is that it automatically provides you with information about exactly how your customers use your product.

Both of these models will usually have no startup costs or minimum commitment, making it very easy for a customer to start using your software.

Dongle implementation

When using a dongle to enforce a subscription licence you would typically set an expiry date in the dongle. If the customer continues to subscribe then you would need to periodically update the expiry date in the dongle. This is done by generating a unique update code on a per-dongle basis.

Similarly, when implementing a pay-per-use licence you would use a counter in the dongle, such as the execution count feature built in to Dinkey Pro Plus and Net dongles. Each time your software is executed or a particular function in your software is used, the the counter is decremented. You will periodically need to refresh this counter: again, this is done using unique update codes.

Both of these methods involve generating update codes for each of your customers, multiple times. To provide the highest level of security, Dinkey Pro update codes are generated on a per-dongle basis and can be used only once. However, this can quickly add up to a large number of update codes that you need to produce. In addition to this you have to keep track of the current status of each customer's dongle, and the customer may sometimes forget to apply an update code or send you the wrong information. This can waste valuable time.

DinkeyOMS

The update process can be made much simpler by using DinkeyOMS. DinkeyOMS is an online management system that is used to store the current state of each of your dongles. If you make a change online then the update code is pushed to the user's computer and the update is applied to the dongle automatically. DinkeyOMS requires the user to have internet access, or at least periodic internet access.

In addition, you can fully automate the whole update process by linking DinkeyOMS with an online payment system. Customers can purchase an extra period of use or top up their usage counter on a website you provide, and the update code will be generated and applied to their dongle automatically without you or your customer needing to carry out any additional steps.