This is exactly right - licensing exists for enforcing contracts. Weak systems (e.g. serial-only licensing) results in actual lost sales. It's not always malicious thieving - mostly it's just inefficient bureaucracy.

This means you should either protect your software using hardware dongles, or online activation. Hardware dongles are a pain in the ass and will increase your support costs, but some companies prefer them.

Nadam, if you're looking for licensing and online activation we're the makers of LimeLM (http://wyday.com/limelm/ ). Or you can build your own. But we do offer entrepreneur friendly pricing.