The document discusses the monetization of software, machines, and materials through new business models such as pay-per-use and subscription models, emphasizing the need for flexible licensing options that align with market demands. It highlights various scenarios for pay-per-use applications, including software functionalities and machine operation, along with methods for billing and licensing management. Additionally, the risks and opportunities associated with pay-per-use licensing are examined, indicating potential for higher revenue and wider customer access despite longer amortization periods.

1. … to Monetize Software, Machines
and Materials
Stefan Bamberg | Senior Key Account
& Partner Manager
stefan.bamberg@wibu.com
Joerg Jans | Professional Services
joerg.jans@wibu.com
New Business Models …
16.11.2017 © WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models 1

2. Motivation
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3. Revenue Generation vs. Market Requirements
§ The ISV (Independent Software Vendor) wants to amortize the investment
in software development and make a profit
§ Which added value does software create for the end user? What is he
willing to pay for it?
§ The market demands flexible licensing models, like:
§ Features-On-Demand: Paying only for the necessary functions
§ Subscription: Paying only as long as the service is used
§ Maintenance Contract: Annual fee to enjoy all available updates and upgrades
§ Pay-per-Use: Paying only for what you actually use
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4. Revenue Generation vs. Market Requirements
§ Usage-based license models allow the end user to get a
taste of the offer for a lower upfront cost
§ One-time fee vs consumption fee
§ Business customers are more likely to have access to limited but
recurring budgets (OPEX, Operational Expenditures), rather
than high one-time investments (CAPEX, Capital Expenditures)
§ Pay-per-Use can bring in additional revenues for
consumables
§ Permanent income can exceed income generated
by one-time sales
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5. Scenarios for the
Application of Pay-per-Use
16.11.2017 © WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models 5

6. Scenarios for the Application of Pay-per-Use Licensing
§ Use cases for billing with Pay-per-Use (Software)
§ Billing program calls
§ Billing the use of individual functionalities
§ Calculation routines
§ Export/Import of data, printouts
§ Demo versions
§ Billing time-based functionalities
§ Assignment of time periods to usage units
§ Billing the actual usage time (e.g. calculation algorithm)
§ Billing time-based subscription licensing models
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7. Scenarios for the Application of Pay-per-Use Licensing
§ Use cases for billing with Pay-per-Use (Machines)
§ Billing of each use of a machine or functionality usage
§ The usage counter is safeguarded in a protected container (CmDongle,
CmActLicense, CmCloudLicense)
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543210

8. Scenarios for the Application of Pay-per-Use Licensing
§ Use cases for billing with Pay-per-Use (Materials)
§ The machine is supplied at a discounted price
§ The end user buys high quality material directly from the manufacturer of the
machine or from "certified" third-party suppliers
§ Coupling the Pay-per-Use counter with the number of sold materials (x pieces of material equals x
units of use)
§ The end user buys the material and receives the associated usage licenses
§ Buying "cheap material" becomes senseless, because it comes with no associated
pay-per-use licenses
§ Concrete examples: tooth inlays (Blocs), printing cartridges, …
16.11.2017 © WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models 8

9. Scenarios for the Application of Pay-per-Use Licensing
§ Protection against product counterfeiting via Pay-per-Use
§ Use case from the textile industry (Project Pro-Protect):
§ Embroidery orders for logos (e.g. on caps) are advertised worldwide
§ Production number (pay-per-use counter) and encrypted logo to embroider are
transferred online/offline to a CmDongle (secure element) in the machine
§ 24/7 worldwide automation possible
§ Only the real production order can be executed, the logo cannot be read. No more
production of extra caps during "night shifts"!
§ Additive Manufacturing
§ Protection and monetization of 3D printing plans
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10. Scenarios for the Application of Pay-per-Use Licensing
§ Emergency licenses over Pay-per-Use
§ Alongside the purchased licenses, the end user receives emergency licenses
§ Same functionality as the basic licenses (individual emergency license)
§ Full functionality of the software (general emergency license)
§ These can only be used under restricted conditions (x amount of times)
§ While using the emergency licenses, the purchased license can be renewed
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11. Billing Methods
§ Prepaid
§ The end user pays the usage units in advance
§ The usage counter (PIO:Unit Counter) in the license is set in advance by the ISV to
a starting value and later counted down in the software
§ Recharge or increase is possible at any time online or offline via license update
§ Consumption related
§ The usage counter is set to the maximum value in advance (4 billion) and counted
down in the software
§ The difference with the current value indicates the consumed units
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12. Billing Methods
§ Overload licenses via Pay-per-Use
§ The customer buys x licenses for normal operation
§ The customer receives x licenses + Pay-per-Use license for peak load coverage
§ The functionality of the licenses is identical
§ Billing takes place after expiration date
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20 +

13. Technical Implementation
with CodeMeter
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14. Delivery to the End Users
Integration in the Process
Integrate Once – Deliver Many (PC Software)
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Integration in the Software
Software Software
CodeMeter
Protection Suite
Integrate Once Deliver Many
ERP/CRM
e-commerce
Software
License Portal
License
Central
License
Central

15. Delivery to the End Users
Integration in the Process
Integrate Once – Deliver Many (Embedded System Software)
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Integration in the Software
Software Software
CodeMeter
Protection Suite
Integrate Once Deliver Many
ERP/CRM
e-commerce
Software
License Portal
License
Central
License
Central

16. Integate Once – Deliver Many
16.11.2017 © WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models 16
License
• Basic Module
• Stand alone
• Additional Module
• Stand alone
• 30 days
License
• Basic Module
• 10 Users
• Additional Module
• 10 Users
License
• Basic Module
• 7 Users
• Additional Module
• 5 Users
License
• Basic Module
• Pay-per-Use
Software Software Software Software

17. License Entry
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§ License Entry = Firm Code | Product Code
§ Firm Code: provided by Wibu-Systems
§ Product Code:
§ Chosen by the ISV
§ For each Option / Module / Feature
§ 4 billion Product Codes (UInt32)
§ Product Item Options: Each license can have
combinable options
§ License models can be changed on-site
Firm Code: 6000010
…
Product Item Options
Product Code: 201.000
Product Item Options
Product Code: 201.001
Product Item Options
Product Code: 201.002

18. Product Item Options
© WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models 18
Text
License Quantity
Activation Time
Expiration Time
License Transfer
Linger Time
User Data
Protected Data /
Extended Protected Data
Customer Own License
Information
Named User License Hidden Data
Secret Data
Usage Period
Unit Counter
Feature Map
Maintenance Period
Minimum Runtime Version
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Module Items

19. Integration of Pay-per-Use Licenses
§ Using Pay-per-Use via AxProtector
§ Automatic usage via AxProtector
§ No program intervention necessary
§ Each program call decrements the value
§ Definition of the warning message
§ Usage in source code via WUPI in combination with AxProtector (license list)
if (Wupi.AllocateLicense(0))
{
if (!Wupi.DecreaseUnitCounter(0, 1))
{
// Error Message
}
Wupi.FreeLicense(0);
}
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20. Integration of Pay-per-Use Licenses
§ Demo
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21. Integration of Pay-per-Use Licenses
§ Integration via CodeMeter Core API (1)
§ Access license and check if PIO "UnitCounter" exists
CmAccess2 cmacc2 = new CmAccess2();
cmacc2.FirmCode = firmCode;
cmacc2.ProductCode = productCode;
HCMSysEntry hcmse = cmApi.CmAccess2(CmAccessOption.Local, cmacc2);
if (hcmse != null)
{
int unitCounter = -1;
CmBoxEntry2 boxEntry = (CmBoxEntry2)cmApi.CmGetInfo(hcmse,
CmGetInfoOption.EntryInfo2);
if (((boxEntry.SetPios) & CmBoxEntry2.PioUnitCounter) ==
CmBoxEntry2.PioUnitCounter)
{
unitCounter = Convert.ToInt32(boxEntry.UnitCounter);
DecreaseUnitCounter(hcmse, 1);
}
cmApi.CmRelease(hcmse);
}
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22. Integration of Pay-per-Use Licenses
§ Integration via CodeMeter Core API (2)
§ Decrement PIO "UnitCounter" with cryptographic operation
private bool DecreaseUnitCounter(HCMSysEntry hcmse, int amount)
{
// random encryption code
Random rand = new Random();
// set encryption parameters
CmCrypt cmcrypt;
cmcrypt = new CmCrypt();
cmcrypt.BaseCrypt.Ctrl = CmBaseCrypt.Option.Aes | CmBaseCrypt.Option.CalcCrc;
cmcrypt.BaseCrypt.EncryptionCode = (uint)rand.Next();
cmcrypt.BaseCrypt.EncryptionCodeOptions =
(int)CmBaseCrypt.EncCodeOption.UnitCounterCheck |
(uint)(amount & (int)CmBaseCrypt.EncCodeOption.UnitCounterDeltaMask);
CmCryptOption flCtrl = CmCryptOption.DirectEncryption;
// create a dummy sequence to encrypt
byte[] abBuffer = new byte[16];
return cmApi.CmCrypt(hcmse, flCtrl, cmcrypt, abBuffer);
}
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23. Distribution and Update of
Pay-per-Use Licenses
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24. The Solution
Page 24
§ License Lifecycle Management
§ Create
§ Deliver
§ Manage
§ Ticket System
§ Uniform solution for
§ On-premise scenarios
§ Cloud-based scenarios
§ SOAP Interface
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25. End UserISV
CodeMeter License Central – Activate & Update
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Ticket + Digital Fingerprint
4
License
5
Ticket
2
Order
1
e-commerce
ERP/CRM Software
License Portal
Ticket:
ABCDE-FGHIJ-KLMNO-PQRST-UVWXY
3
© WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models

26. Update of Pay-per-Use Licenses
§ Automatic collection of new usage units via CodeMeter License Central
§ Save the initial ticket (activation code) in the application
§ Update the licenses in the same ticket via CodeMeter License Central
§ Cyclical demand for new usage units via Gateway
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License
Central
Gateway
Application

27. Creation, Distribution, and Updates of Pay-per-Use Licenses
§ Demo
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28. Risks and Opportunities of
Pay-per-Use Licensing
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29. Risks and Opportunities
§ Risks
§ In contrast to revenues generated from traditional license models, the pay-per-use
approach requires more time to amortize the costs
§ Opportunities
§ With the pay-per-use approach, high-quality products generate higher revenue over
the product lifecycle
§ Wider customer base thanks to low entry threshold
§ Higher flexibility (emergency and overload licenses, …)
§ Billing of consumables
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30. Summary
§ Pay-per-Use Licensing with CodeMeter
§ Can be easily implemented with the existing functionality of CodeMeter
§ Can be used in the same way for software, machines, materials and IP protection
§ Supports prepaid and consumption billing
§ Recharging/increasing usage units can be done offline or online via the standard
CodeMeter License Central mechanism.
§ Possible integration into existing back office systems (SAP, ...) and online shops
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31. Germany: +49-721-931720
USA: +1-425-7756900
China: +86-21-55661790
http://www.wibu.com
info@wibu.com
Thank you for your attention
16.11.2017 © WIBU-SYSTEMS AG 2017 - Monetizing Software, Machines, and Materials with New Business Models 31