Reading between the lines, it sounds like the Navy insisted that the phone-home mechanism was removed, either for confidentiality/DLP concerns, or because it can be a bit of a challenge to perform an online activation from the middle of the Pacific ocean.
Bitmanagement were happy to accommodate their request on the expectation that this would be a contract for hundreds of thousands of licenses, but it seems the Navy then proceeded to go live despite never purchasing any licenses beyond the original 38 they purchased to trial the software.
Why do they think they needed 38 licenses to install unlimited copies? That's stupid... one license you can confuse maybe, but if you have more than one there are obviously terms. If BM failed to put that in writing, they are stupider.
Quite possibly, the 38 licenses was the number deemed necessary, after negotiations, for the purpose of a limited trial. It usually goes something like "OK, we need 20 licenses for the lab, 6 for the devs to use when integrating with XYZ and a further dozen for demos, laptops and some flexibility in testing."
Most small ISVs would deeply discount or otherwise sweeten that deal with the expectation of negotiating a large scale site license once testing is successful. 500k seat would probably be discounted drastically to something like 10m $ / year (BS Contact seems to sell for 300 euros / license.)
Certainly in my experience of working with vendors, that deal would not only be sweetened, but we wouldn't even consider entertaining the idea of paying anything for such a trial. It would be considered a proof of concept and we'd want to be able to play with it until we were happy.
Of course, if we got as far as asking you to remove copy protection, then we're probably way past PoC stage and into serious contract negotiations.
I can't help feeling like both parties probably allowed this to happen because they felt it would improve their bargaining position. The Navy possibly felt that by dragging out the negotiation until way after the live deployment is complete, they can keep BS waiting until they go bust or accept a lower price. BS know that once the software is out there with no further negotiations about price, they're in a solid position to charge the full amount, which they can legally enforce if necessary.
Then invoice time comes around, the two parties are at completely opposite ends of the spectrum in terms of pricing, and here we are.
Using a central license server can be used to license the number of concurrent users. I've installed software on thousands of computers as part of a base image that only had 25 concurrent licenses paid for. The usage pattern meant that we rarely exceeded the number of concurrent license, but the software was widely used enough that it made sense to deploy everywhere. In the end we also asked for the limitation to be removed because of several issues (eg; the check out process for off-network usage was cumbersome and locked up licenses for too long, the license server wasn't great at releasing license and we'd frequently have to manual release them). After monitoring our usage over a period of time the software company agreed that removing the license server was the best option to address the issues. I have no knowledge of this case, but this is one scenario where the number of licenses would be so much lower than the number of installs.
Agreed. I was responding to hashkb as to why they might think they could install it widely without having more than 38 licenses. It also seems like a valid reason to ask for the phone-home mechanism to be removed without malicious intent to subvert licensing restrictions.
Bitmanagement were happy to accommodate their request on the expectation that this would be a contract for hundreds of thousands of licenses, but it seems the Navy then proceeded to go live despite never purchasing any licenses beyond the original 38 they purchased to trial the software.