I am curious about how do you protect your software against cracking, hacking etc.
Do you employ some kind of serial number check? Hardware keys?
Do you use any third-party solutions?
How do you go about solving licensing issues? (e.g. managing floating licenses)
EDIT: I'm not talking any open source, but strictly commercial software distribution...
There are several methods, such as using the processor ID to generate an "activation key."
The bottom line is that if someone wants it bad enough -- they'll reverse engineer any protection you have.
The most failsafe methods are to use online verification at runtime or a hardware hasp.
Good luck!
Online-only games like World of Warcraft (WoW) have it made, everyone has to connect to the server every time and thus accounts can be constantly verified. No other method works for beans.
As has been pointed out, software protection is never guaranteed to be foolproof. What you intend to use depends largely on your target audience. A game, for instance, is not something you are going to be able to protect forever. A server software, on the other hand, is something far less likely to be distributed on the Internet, for a number of reasons (product penetration and liability come to mind; a large corporation does not want to be held liable for bootleg software, and the pirates only bother with things in large-enough demand). In all honesty, for a high-profile game, the best solution is probably to seed the torrent yourself (clandestinely!) and modify it in some way (for instance, so that after two weeks of play it pops up with messages telling you to please consider supporting the developers by purchasing a legitimate copy).
If you put protection in place, bear two things in mind. First, a lower price will supplement any copy protection by making people more inclined to pay the purchase price. Secondly, the protection must not get in the way of users - see Spore for a recent example.
The trouble with this idea of just let the pirates use it they wont buy it anyway and will show their friends who might buy it is twofold.
With software that uses 3rd party services, the pirated copies are using up valuable bandwidth/resource which gives legit users a worse experience, make my sw look more popular then it is and has the 3rd party services asking me to pay more for their services because of the bandwidth being used.
Many casual wouldn't dream of cracking the sw themselves but if there is an easy assessible crack on a site like piratebay they will use it, if there wasn't they might buy it.
This concept of not disabling pirated software once discovered also seems crazy, I don't understand why I should let someone continue to use software they shouldn't be using, I guess this is just the view/hope of the pirates.
Also, its worth noting that making a program hard to crack is one thing, but you also need to prevent legit copies being shared, otherwise somebody could simply buy one copy and then
share it with thousands of others via a torrent site. The fact of having their name/email address embedded in the license isn't going to be enough to disuade everyone from doing this, and it only really takes one for there to be a problem.
The only way I can see to prevent this is to either:
Have server check and lock license on program startup every time, and release license on program exit. If another client starts with same license whilst the first client has license then it is rejected. This way doesn't prevent the license being used by more than one user, but does prevent it being used concurrently by more than one user - which is good enough. It also allows a legitimate user to transfer the license on any of their computers which provides a better experience.
On first client startup client sends license to server and server verifies it, causing some flag to be set within the client software. Further requests from other clients with the same license are rejected. The trouble with this approach is the original client would have problems if they reinstalled the software or wanted to use a different computer.
I agree with a lot of posters that no software-based copy protection scheme will deter against a skilled software pirate. For commercial .NET based software Microsoft Software License Protection (SLP) is a very reasonably priced solution. It supports time-limited and floating licenses. Their pricing starts at $10/month + $5 per activation and the protection components seem to work as advertised. It's a fairly new offering, though, so buyer beware.
DRM this, DRM that - publishers who force DRM on their projects are doing it because it's profitable. Their economists are concluding this on data which none of us will ever see. The "DRM is evil" trolls are going a little too far.
For a low-visibility product, a simple internet activation is going to stop casual copying. Any other copying is likely negligible to your bottom line.