Software licensing offers legally binding recommendations for software distribution and use. Its terms and conditions may include the software’s fair use, warranties, disclaimers, and limitations of liability. A software license specifies protections for when the software or its usage violates others’ intellectual property rights.

While software licensing limits vendor liability, safeguards a developer’s trade secrets and intellectual property and restricts what others can do with a covered software code, licensing blunders can be costly. This article outlines six software licensing mistakes you should avoid.

Failure to Implement an Effective Software Licensing Solution

Software licensing solutions enable independent software developers to license the applications they’ve developed to customers on specific terms. Your software licensing solution ensures that clients can only use the app based on those particular terms. A traditional licensing solution is dated and cumbersome and has a lot of manual processes, wasted resources, and infrastructure. It depends on software license dongles or keys, which may not address particular licensing issues.

An effective software licensing solution can maximize revenue and safeguard your intellectual property from unauthorized use. With a modern licensing solution, you can run everything from the cloud, eliminating licensing complexity and ensuring a good customer experience.

Not Tailoring Your Licensing Models to Suit Customer Needs

The licensing model you choose should depend on a deep understanding of customer values and requirements when licensing your software. Consider assessing current use and tracking market trends and your industry’s direction. Your goal should constantly be providing exceptional user experience and customer satisfaction long after a prospect converts into a customer. You can provide time-limited, perpetual or trial, subscription, user-based, floating, consumption, or node-locked license models based on customer needs and requirements.

Failure to Establish Clear Goals

Lack of a goal-oriented plan results in missed revenue opportunities, poor product maintenance, and user frustration. Without a clear software licensing vision, you risk exposing your software development efforts to analysis paralysis and piracy. Developer faults, including unguided management and poor product management, can lead to the release of an ineffective licensing system, causing substantial ROI losses and damaging customer loyalty.

When licensing your software, you can break it down to usages, time, and features that can help minimize the cost to your customers, increasing your monetization capability and market share.

Not Choosing a Suitable Licensing System

Managing software licensing can be easy with a licensing system suitable for your budget, timeline, and goals. Cloud-based, hardware-based, and software-based licensing systems are the primary options to consider. License systems that work best for you depend on your product’s nature. Ensure your app correctly suits your software to ascertain that the software’s timeliness and delivery resonate with your licensing system.

 For instance, a hardware-licensing system would be ideal when using your application to distribute physical products. However, you should decide if the dongle can be external or internal. If you’re distributing cloud-based apps, you can pair them with cloud-based licensing solutions to ensure the end-users don’t have to wait for hardware devices in their mails.

Failure to Gather Software Licensing Implementation Resources

Once you develop a licensing software plan, avoid taking shortcuts. Consider devoting the necessary tools, team communication, and funds to implement software licensing. Effective licensing should correctly allocate capital, labor, and time because too much or too little of either can lead to vulnerable software, a lack of demand if you don’t market early, and reduced ROI. Distribute your time, capital, and labor in a way that helps you strike an ROI-maximizing balance.

Not Setting a Budget and Timeline

A proper management process is crucial to ensuring smooth software licensing. An excellent licensing strategy requires time and money. When creating a budget, determine the tools and resources you’ll need, the number of people it’ll take, how much you’ll pay them, and whether you need to consult or use outside resources. To develop a timeline, identify the specific activities to complete to implement the licensing plan and when to schedule meetings.


While software licensing protects intellectual property, errors can compromise the process. Consider avoiding these mistakes to maximize revenue and ensure legal software use.