A vocabulary for product licensing

Getting a shared vocabulary for conversations is always useful. Here’s a pattern/vocabulary that I’ve recently been introduced to for thinking about software product licensing.

  • Product Key
  • License
  • SKU

Product Key

A product key is the cryptographic software control used to control who/what can use the software


A license is the concept encapsulating that a customer is allowed to use the software. A customer is licensed to use software. This probably aligns with the legal contract that is used.


The SKU/stock keeping unit is how sales people can talk about the product. They sell a SKU to a customer.

The customer licenses the SKU (product), and then they are issued a product key which enables them to use the software.

The precise definitions for product keys, licenses and SKUs is valuable when communicating between product, sales and marketing teams. The list above seems to work pretty well. Let me know in the comments if you’ve got better ideas.

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