What is “product activation” and how is it superior to legacy “license key” based systems?

Internet-based product activation is a replacement for traditional “license key” based systems and is now commonly used in the software industry.

Product activation is a system that is based on license identifiers, also referred to as key codes or product serial numbers. In response to fulfilling an order, or making a distribution-media copy as part of the physical distribution-medium manufacturing process, an ISV creates a unique key code. The key code is registered in a license server that is hosted by the ISV. When an end user installs the product, the key code is provided to the program. Either at the time of installation or upon first licensed use, the application contacts the hosted server over the Internet to communicate its keycode and introspected machine identification information to the server. The server first verifies that the key code is not already in use for a different machine, and if not, grants the activation request by recording the machine identifier in the server and returning an encrypted string, variously referred to as key, key string or product key, which the application stores in the registry. Subsequently, whenever the application is run, it looks up the key string in the registry, decodes it and verifies it is valid and for the machine on which the application is running. In the event that Internet connectivity is not available at the time of activation, the user has the option to complete the activation over the phone or using a web browser: the application produces a code that the end user is instructed to call in or provide to a self-service page, and receives the product key in response.

The primary value of product activation over legacy license key based systems is automation of the node locking process for the purpose of simplifying the logistics of product media distribution and order fulfillment. This is about the extent of the benefit of product activation with most commercial systems. As described below, Orion extends the benefits of product activation in a number of areas that provide the benefits of reduced operations cost and added security through entire licensing lifecycle, in addition to enabling capabilities such as revocable licensing that are not possible with legacy key based systems.