License dongles - the underrated key to protecting valuable software

Imagine that an inconspicuous USB stick in your drawer is the key to software worth tens of thousands of euros. Let me introduce you to the often underestimated world of license dongles - a proven but complex instrument for protecting software licenses.

In the dynamic IT world, where software piracy and copyright infringements are commonplace, software manufacturers face the challenge of effectively protecting their products. One of the oldest and yet most widespread methods is the use of license dongles. These small devices, which often look like ordinary USB sticks on the outside, play a central role in protecting software licenses - not only for specialized applications, but also for well-known software solutions from companies such as Datev. But what exactly is behind a dongle and what challenges and opportunities does its use entail? This article examines the advantages and disadvantages of license dongles and explains why they continue to play an important role despite modern alternatives.

A license dongle is a hardware device that is usually designed as a USB stick. Important information such as a license code or a serial number is stored on this stick, which legitimizes the use of a particular software. Without the dongle, the software often remains incomplete or does not start at all. This method of license activation offers manufacturers effective protection against unauthorized use.

Dongles are not only used for specialized software, but also for established programs. The advantage is obvious: the software is protected and use is restricted to authorized users. However, this security comes with restrictions, particularly in terms of flexibility. Unlike floating licenses, which allow flexible license distribution across a network, dongles are tied to physical locations. This means that a dongle must always be available where the software is to be used. This can be particularly problematic for internationally active companies, as it is often unclear whether cross-border use of the dongle is permitted at all.

Many users wrongly assume that physical possession of a dongle automatically allows the software to be used anywhere. In reality, however, there are often geographical restrictions that users are not aware of. Dongles are often sent between different locations or even across national borders without considering the legal consequences. However, such actions can result in copyright infringements and lead to high penalties. It is therefore crucial to check the license conditions carefully and ensure that the use of the dongle complies with the applicable regulations.

Risk of loss and the high value of a dongle: An often overlooked aspect of dealing with license dongles is the risk of losing them. Even at the beginning of my work as a license manager, where I was responsible for the administration of around 1,000 dongles, I became aware of the enormous importance of careful handling of these devices. This became particularly clear when it turned out that an inconspicuous dongle was worth around 15,000 euros and could not be replaced if lost. This realization made it clear to me early on that the value of such a dongle is easily equivalent to that of a small car and that its loss could not only paralyze the workflow of entire departments, but also cause immense costs. To minimize such risks, some departments have purchased safes to keep these valuable license media safe. After all, productive work is often not possible without a dongle - and replacing one can be expensive.

Employees who are aware of the value and importance of a dongle often develop their own protective behavior. This often leads to the dongles being safely stowed away in drawers and easily forgotten in day-to-day business. It becomes particularly problematic when employees leave the company and these valuable devices are left unnoticed in their desks. To avoid such losses, it is crucial to establish clear documentation and return processes for dongles.

To avoid the disadvantages of physical dongles, some companies rely on dongle servers. These servers serve as central hubs to which several dongles can be connected so that authorized employees can access the licenses remotely via the network. This solution seems sensible at first glance, but many manufacturers prohibit this practice or only allow it under strict conditions. The reason is clear: dongle servers could easily circumvent the geographical restrictions of the licenses, which increases the risk of license violations. As a license manager, you should therefore exercise particular caution to avoid costly compliance violations.

Despite more modern alternatives, license dongles remain a proven means of protecting software from unauthorized access. They offer robust security, but also come with significant limitations and challenges. Companies using dongles should be aware of geographical restrictions and implement measures to prevent loss. Well thought-out license management that takes into account the special features of dongles is therefore essential to ensure efficient and legally compliant software licensing.

Author: Volker Albrich