What is Licensing as a Service (LaaS)?

License as a Service (LaaS) refers to license servers for cloud software where software vendors get help with license issuance, activation, validation, and management. LaaS is not one of the three NIST-defined core cloud service models; LaaS is a licensed licensing and entitlement service delivered as a hosted service.

These terms describe different levels or functions of cloud delivery.

Perpetual licensing is about how long a customer’s license is in effect, whereas LaaS is about how licensing or entitlement is managed. A perpetual license typically grants the ongoing right to use software under the agreed conditions. Alternatively, a license incorporates elements such as activation requirements, device quantity, or checks by license servers for entitlements. LaaS pertains to more than just subscription models. Software licensing systems deployed over the web can be designed to handle perpetual license, floating license, subscription license, node-locked license, or pay-per-use models.

The above are related to licensing, but their functions differ.

• The billing function keeps track of metered usage, such as the number of active user seats, devices, feature usage, or API call volume. Metered billing is generally triggered when the limit is reached.
• A EULA spells out the legally binding agreement that a customer agrees to be bound by as they use software.
• DRM relies on techno-legal methods to set limits, enforce permissions and restrictions, and regulate access to digital works or content.
• An entitlement management solution can link a customer’s commercial rights to activation procedures, access criteria, consumption limitations, expiry, and other similar lifecycle aspects.

Some DRM & licensing mechanisms share similar functionalities. For example, DRM can handle licensing, expiration, and access features, whereas license-as-a-service combines with DRM without abandoning it.

Providers may differ in their offerings, but generally, they offer the following functions:

• Issuance: This function refers to generating a license, token, etc.
• Активація: This feature maps a license “key” to a user, device, account, or environment to grant access.
• Керування правами доступу: Defining a product’s characteristics, available features, different levels, seats, or types of users.
• Metering: Capturing the usage data when the commercial model is based on consumption.
• Валідація: Performing a check to allow or reject access based on user rights.
• Renewal and expiration: The right to use time-limited rights when needed.
• Revocation: Disabling or changing an entitlement when it is allowed.
• Reports: It indicates the status of activation, usage, and licenses.

A licensing agreement between the author and the buyer and asset management software are two completely different tools that address different issues. The producer of the license uses licensing capabilities to create and grant rights to its product. Customer organizations may purchase software asset or IT asset management software to manage software purchases, reconcile rights with actual licenses, monitor distribution, and address compliance and optimization issues related to more than one vendor.

Publishers create a business licensing plan, then identify technical features and tools that would support it. They will ask questions like whether the product can work in an offline environment (or not), how users/devices are going to be authorized, how entitlements are updated, whether usage has to be tracked, and what would happen if the license service was going down.