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Serial Number Politics

Volume Number: 20 (2004)
Issue Number: 11
Column Tag: Programming

Software Marketing

Serial Number Politics

by Dave Wooldridge

This month, we'll investigate the mystical world of serial numbers. If the only way for customers to unlock your trialware is by purchasing a serial number, then crafting a secure and reliable registration/activation system is an important step that needs to be addressed before software licenses can be sold.

Protecting Your Software Products from Piracy

In the January issue, we explored various ways to package and protect your software for distribution, weighing the pros and cons of demoware, trialware, installers, and disk images. In the February and June issues, we discussed various purchase incentives and upgrade strategies. Now that we have a defined game plan for distributing and selling our fictional software product, CodeQuiver, we need to build the infrastructure for "unlocking" registered software.

Streamlining the Registration Process

There was a time when most Mac shareware developers simply included their own variations of the common "Register" application with their software. This stand-alone utility would usually display a simple order form interface, customized with the product's price and sales info. Users would fill out the form and then choose to either submit the order electronically or print it out for mailing or faxing. Once the order was received, the vendor would then either mail out the registered product on floppy disk or CD, or e-mail a serial number to the customer. The Internet has come a long way since then, allowing developers to utilize sophisticated e-commerce web applications for quickly processing secure electronic orders, activating licenses, and issuing serial numbers. The current generation of e-commerce solutions has empowered developers with new streamlined ways of incorporating the purchase process directly within their software without the need for a separate stand-alone utility. Some software products simply include a menu item for visiting their web store's online order form, while others utilize eSellerate's Integrated eSeller technology, enabling customers to purchase and register the software from within the application itself! Regardless of the purchase method, consumers have come to expect quick results. Customers used to be content with waiting 24 to 48 hours before receiving a serial number via e-mail, but in today's fast-paced world, expectations have changed. Users assume your software can be unlocked/registered immediately upon purchase.

If you're still generating and e-mailing individual serial numbers by hand (and you'd be surprised how many of you are still out there), you're not only wasting your valuable time, but you're preventing your business from growing. Manually e-mailing a serial number to a customer when notified of their payment may not seem like much of a burden if you only receive a few orders each day. Most of us keep our e-mail programs running on our desktop all day, so responding to a handful of customers each week in a timely fashion seems easy enough to manage, but what happens when orders increase to several dozen each week or even each day? If you're a single person operation, running your shareware business out of your home, an overwhelming avalanche of sales is the kind of problem you dream of having. But now you find yourself spending most of your days generating serial numbers and sending e-mails, leaving little time to actually develop software and maintain the other aspects of your business. And what if you decide to go on vacation? You can't leave your customers hanging, waiting impatiently for two weeks for a serial number. That's just bad business. You may return from your vacation to find a horde of angry customers demanding refunds and threatening to report you as a fraudulent company.

It's worth the time and investment to develop your own in-house tools for generating large volumes of serial numbers and linking individual numbers to customers. Being able to track the serial numbers assigned to each customer will enable you to trace the origins of pirated serial numbers as well as authenticate customers who request technical support. Having the ability to quickly generate large quantities of unique serial numbers is also crucial when dealing with third-party e-commerce companies and international distributors. You'll want to provide blocks of serial numbers to these kinds of vendors, so that they can easily resell and register your product to their customers. The importance of this will be explained throughout this article.

If you host your company site on your own web server, then you have the flexibility to build your own custom web applications for delivering, activating, and validating serial numbers. This kind of automated system allows your customers to place orders and immediately unlock their software around the clock. Since your online web store caters to an international market of various time zones, having an automated system is not only a convenience that your customers expect, it also allows you, the developer, to finally get some sleep and take vacations without perpetually worrying about serial numbers.

If you utilize a third-party e-commerce solution such as eSellerate, then most (if not all) of this automated functionality is already built into their provided service. eSellerate, for example, assigns a serial number set to each product that you add to your online catalog. This serial number set can either be eSellerate's serial number generator, your own custom algorithm, or a block of your own unique serial numbers that you upload to their system. eSellerate will even notify you via e-mail when your list of serial numbers runs low, so that you can replenish the inventory with more. With your serial number set assigned, eSellerate automatically e-mails a unique serial number to each customer after payment has been received. And if you use eSellerate's Integrated eSeller technology within your application, after a customer submits their billing information and the payment is processed, a serial number is instantly sent back to the application. With very little code, you can program your application to insert the transmitted serial number directly into the serial number field of the registration window (see Figure 1). This integrated solution turns software purchasing into a powerful, streamlined process. With only a few button clicks, customers can purchase and register your software without having to leave the application. We've released a few of our Electric Butterfly products with eSellerate's Integrated eSeller and now approximately 40% of our sales come from the Integrated eSeller (with the other 60% of orders coming from our web store), so it is definitely a convenience our customers appreciate.


Figure 1. The registration window for our fictional CodeQuiver product.

When designing your registration window, there are some vital components you'll want to include. In the registration window of our fictional CodeQuiver product (see Figure 1), the "Purchase" button is set as the default, informing the user that this is the first step. As previously described, you may choose to program the "Purchase" button to either launch an Integrated eSeller for purchasing the software directly within the application (if you use eSellerate) or to simply direct the user to your web store's online order form (via the default web browser). If using an Integrated eSeller, a successful payment returns a unique serial number which your application can intelligently display in the serial number field and then assign the "Register" button as the default. Whether the serial number is dynamically inserted into the registration window or the customer manually copies and pastes it from a confirmation e-mail, it's a good idea to require customers to submit their full name with the serial number in order to complete the registration process. Many software companies require an online connection in order to register, so that the user's name and serial number can be authenticated by an online server application. By "phoning home" during the registration process, it gives software companies the opportunity to check new registrations for pirated serial numbers (using their own "blacklists" for comparison). There are some developers who object to this strategy, so whether your software actually "phones home" or not, requiring users to submit their full name with the serial number will still make some casual pirates think twice before clicking the "Register" button.

For shareware and trialware products, the registration window usually appears every time the unregistered application is launched, so you'll want the window to include some brief information about how the trial is crippled or time-limited and how purchasing a license removes the demo mode. Since your goal is to inspire them to buy the product, take the time to design an elegant registration window. Figure 1 includes CodeQuiver's logo and key art in an effort to "beautify" the window with a little extra polish.

Creating Your Own Algorithm

Even though some e-commerce solutions such as eSellerate provide their own services for generating and activating serial numbers, there are drawbacks to using third-party serial numbers. One disadvantage is that some third-party serial number generators do not allow you to add your own reference keys to differentiate between product names and version numbers. Including special identifiers in your serial numbers can be helpful when processing customer service requests. The most serious drawback is that in many cases, it ties your sales to a single e-commerce vendor. For example, eSellerate needs to process the sale in order to generate and activate an eSellerate serial number. For shareware developers and hobbyists who do not plan to ever localize their software in other languages, this may not be an issue. But if you eventually want to localize your software and utilize international distributors to sell your software in other countries, then you'll definitely want to use your own serial number system. The reason is that you'll need to provide a block of serial numbers to each international distributor because they usually handle not only the sale, but also registration and customer support for your product in their native language - a turn-key service you will greatly appreciate (unless you speak eight different languages and require no sleep). By utilizing your own serial number system, you can easily generate unique blocks of serial numbers for your third-party e-commerce vendor (such as eSellerate), regional resellers, and international distributors.

So you've spent hours slaving over your serial number algorithm, adding enough complexity to stump even the most dedicated cracker? Before you pat yourself on the back, make sure your programming code accounts for the following issues:


  • Do not hard-code serial numbers into your application. Crackers and even a decent handful of casual pirates know how to scan your application's binary executable for serial number strings. Simply open the application in a resource editor or text editor (like BBEdit) and all of your application's string resources are viewable, embedded within the garbled byte code. Instead, include an algorithm in your application that can "decode" and validate serial numbers.

  • Obfuscate or "Munge" decoder key strings. Like the old-fashioned decoder rings, many serial number algorithms utilize a defined string of alphanumeric characters as a key that is used in the algorithm to encode and decode the numeric sequences used in the serial numbers. If a cracker can find your decoder key string by scanning your application's binary executable with a resource or text editor, then he/she may be able to crack your algorithm if the key is compared with three or more pirated serial numbers. It's bad enough when you have to blacklist a few stolen serial numbers, but the worst case scenario is when crackers figure out how to emulate your serial number algorithm. This would enable them to generate their own endless supply of illegal serial numbers, leaving your current software version completely vulnerable to misuse. Do what you can to avoid this problem by obfuscating your decoder key or any other related strings that might expose your algorithm. Scramble and reassemble the strings in code or use an encoder such as Base64 that will "hide" the string from prying eyes without requiring too much extra programming effort for your algorithm to then decode the strings at runtime.

  • Every serial number should be unique. Think long-term and design a format that allows you to generate at least one million unique serial numbers. While this number may seem wildly optimistic, don't limit the rationale to only sales. Between blacklisting pirated serial numbers and generating large blocks of serials for resellers and international distributors, you'll go through serial numbers faster than you think. Remember, running out of serial numbers may force you to release a new version of your software with a revised serial number algorithm, which is extremely inconvenient for both you and your customers.

  • Think like a hacker. When designing your serial number format, examine your scheme from a cracker's point of view. If it seems like a format that might be easy to crack, then it probably is. When comparing three or more serial numbers, do any patterns easily emerge? Is your algorithm doing nothing more than using a common encoder to "hide" the real values in your serial numbers? For example, some developers generate serial numbers by converting the real values into ASCII character codes. While this may produce an interesting number-based serial, don't think that won't be one of the first things crackers try. ASCII character codes are commonly used in serial number tutorials, so to employ such a simplistic approach is like putting a red target on your back. Be creative.

  • Integrating customer data into serial numbers. In an attempt to curb piracy, many software companies infuse the customer's name, e-mail address or last four credit card digits into the serial number. The theory is if customers' personal data are embedded in the serial numbers, they will be less likely to share the serial numbers with others for fear of it being traced back to them. If you choose to employ such a tactic, do not use the customer's name (unless you encrypt in some way). Your web store is a global business, so your customers' names may include accentuated Unicode characters that may not be easily deciphered by your serial number algorithm. And even if your algorithm can handle Unicode characters, customers may accidentally corrupt the string when copying and pasting it from their confirmation e-mail to your application's registration window. Stick with ASCII-based characters. E-mail addresses are unique and safe to use. The last four digits of the customer's credit card are easy enough to embed into the serial number, but without the rest of the card number, the four digits would not be unique or useful as an identifier. And even though it is only the last four digits, you would surely encounter complaints from customers who are uncomfortable with your unorthodox use of their credit card number.

  • Avoid using dates or decimals. By making your software available to the global community, you cannot depend on dates or decimals to be represented the same way. In the U.S. the month comes before the day, but in many countries, the day comes before the month. March 30, 2004 is often displayed as 30 March 2004. More importantly, decimals are not always represented with a period. Some countries use commas. So your software version number in integer form may display as 1.5 in the U.S. and 1,5 in Germany. You can certainly integrate dates and version numbers into your serial numbers as long as your code properly manipulates the month, day, year, and version properties with these pitfalls in mind.

  • Some letters can be confusing for customers. There are good reasons to include letters in your serial numbers, but be aware that certain letters may cause problems for customers. An upper case "I" and a lower case "l" are often mistaken as the number one. And depending on the display font, an upper case "O" looks just like a zero (see Figure 2, Item 6). If customers type a number instead of the right letter, your software will continue to tell them that the submitted serial number is incorrect and you'll be forced to deal with unnecessary customer support requests.

  • Using special identifiers. You may have noticed that many software companies use identifier letters in the beginning or end of their serial numbers. These letter codes are helpful when receiving customer support requests and when tracking piracy origins. Figure 2 shows an example of some reference keys that are commonly used: (1) company initials, (2) product initials, (3) version number without decimals, (4) operating system platform identifier M/W/L/P, and (5) international distributor initials such as DE for Germany, JP for Japan, US for United States, etc. There is no standard for these identifiers, so design a format that works for your specific needs, but be sure to anticipate long-term goals. For example, you may not utilize international distributors now, but using a regional identifier may prove handy when your operation expands in the future.


    Figure 2. Using identifiers in your serial numbers will help you track piracy origins as well as where specific product versions were purchased.

Battling Piracy

While you should do what you can to make your serial number format and algorithm as difficult to crack as possible, the unfortunate truth is that most of your piracy issues will stem not from cracked code, but from stolen serial numbers that are posted online. With so many illegal warz sites and newsgroups available, it's all too easy for users to find pirated serial numbers. The irony is that many of the users who find pirated serials online would probably buy your software otherwise, but the opportunity to save money often outweighs the moral conflict in their mind. Sure, you could send "cease and desist" letters to those warz sites and their ISPs, but how do you stop the consumers who are already using the pirated serials with your software? Many software companies have found the answer in blacklists.

If you're unfamiliar with the term, a blacklist is usually a database of known pirated serial numbers. If you find your software is prone to piracy, then it may be in your best interest to maintain your own blacklist for each product you release. Every time you find a pirated serial number on the various warz sites (and you should check them often) or receive a tech support request or registration activation with a pirated serial, you should add it to your blacklist.

A blacklist database is most effective when you actively use it to authenticate submitted registrations and customer support requests. Earlier, we discussed applications that "phone home" to a web server during the registration process. This method is effective in stopping most casual pirates since it checks to see if the submitted serial number is currently in the blacklist database. If there's no match and the serial number is valid, then registration is successfully completed. If the server app reports a blacklist match, then your software can cancel the registration process, informing the user that the serial number is invalid and to contact customer service for assistance. The message should not indicate that the serial is pirated, since there's a slim possibility that the user accidentally mistyped the serial number and it coincidentally matches a pirated one. Granted, the odds of this happening are probably miniscule, but all customers should be treated as innocent until proven guilty. Instead of condemning them, give them the opportunity to do the right thing and purchase a legitimate license.

Authenticating the serial number online is completely acceptable during the registration process, but since consumers are usually wary of information being sent online, be sure to inform them with a message that tells them why the application needs to establish an online connection and exactly what data is being transmitted. Do not perform this kind of check every time the user runs your software - it will only make your honest customers feel like criminals.

It's a good practice to require customers to submit their serial number and full name with all customer support requests. This way you can check the serial numbers against your blacklist database for possible matches. No sense wasting your time fielding tech support queries of illegal users. And if you haven't experienced it already, you'll be surprised at just how many pirates have the gall to demand tech support help.

If you're primarily worried about inter-office use of the same serial number among multiple employees, it can be beneficial to make your software network-aware. Upon start-up, your application can silently poll the network for other copies of itself and check for duplicate serial numbers. If matches are found, the application can politely inform the user that the registered serial number is already in use by another copy on the network and present a choice of two buttons: a "Quit" button and a convenient "Purchase" button to order additional licenses.

Some software companies go a step further by limiting the number of times a particular application can be activated. While this can help curb the sharing of serial numbers among co-workers and friends, it can be extremely annoying for those customers who continually upgrade their computers and operating systems. They are still using the same product on only one computer, but upgrading to the next operating system release every six months often requires software to be reinstalled (especially since many users opt for a clean install of each new OS release). So if an honest customer upgraded to OS X Jaguar and then soon after, upgraded to OS X Panther, your imposed three-time limit on product activations is quickly exceeded and the customer is now forced to waste precious time contacting customer service for help.

The same consumer frustration occurs with other anti-piracy methods like expiring serial numbers that need to be renewed once or twice a year. Whatever copy-protection scheme you employ with your software, try to imagine how it will affect your customer relationships. You want to protect your software without annoying your honest customers who have rewarded you with their license payments and continued loyalty. Your customers' experience should never suffer due to a handful of unscrupulous pirates, so try to keep a conscious balance between defensive programming and ease-of-use.


Dave Wooldridge is the founder of Electric Butterfly (www.ebutterfly.com), the web design and software company responsible for HelpLogic, Stimulus, UniHelp, and the popular developer site, RBGarage.com.

 
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