Software licensing is a tricky art - too little security and you leak revenue, too much and you leak customers. I worked on several license management systems at Ç-Dilla and Macrovision so I've spent far more time than is healthy thinking about this problem.
In general I think the best system is one that helps keep honest users honest. A speed bump that itches the conscience but doesn't get in the way of legitimate customers getting their job done.
I just migrated to a new computer and have finished several days of installing software and drivers. This is never a fun task, but I've been through it a few times and keep all my license information on a NAS drive to reduce the pain. WinZip
has a great trial model. The product is fully functional and nags you just enough that you'll eventually pay. I've been a customer for years, and as I moved to Windows 7 I emailed to ask about upgrade pricing. I got a prompt response and was up and running in no time.
I didn't need to upgrade. The old version of WinZip installed just fine using an existing license key.ScanToPDF
from O Imaging was a different story. The license is locked to a PC, and there's no way to move it automatically. You have to email them. It then gets worse - there's an "administration charge" to move a license. So as a paying customer I have to wait for the UK office to respond to email and even then I can't continue to use the product I've paid for.
I'm sure it's in the small print somewhere.
But the impact is that ScanToPDF has lost a customer, an advocate (I've suggested the product to others in the past, never again) and infuriated me enough to throw up a negative blog post. Is the administration charge really worth it?
I use very simple license keys locked just to an email address. I'll refund any purchase with no questions asked. I'll issue new licenses as needed to keep customers happy. I have an online service to retrieve lost keys.
The products get pirated immediately, and finding a key generator doesn't take a lot of sleuthing. I don't care about this at all, because happy customers recommend products to their friends. Pain-free licensing is absolutely key to happy customers. Don't fall into the trap of putting your energy into complicated licensing and enforcing procedures. Add a new feature instead.