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A product key is a specialized code for a licensed piece of software. By using a product key, software companies can ensure that users are not "cracking" products or otherwise accessing them illegally. A product key typically consists of a sequence of letters and numbers that is printed on a sticker inside the box or is otherwise delivered to the legitimate customer.
Software makers have their own conventions for product keys. For example, in some Microsoft products, the product key is 25 characters long. In many cases, a type of verification function or algorithm works to authenticate the product key.
During the early days of PC software, the use of product keys was somewhat effective, but then some users started developing things like product-key generators and other end runs around this type of license security. To combat this, software companies started pursuing more sophisticated license management, such as combining a product key with a piece of data from the user's hardware system, in order to try to verify the validity of the product.
Other approaches have also led to changes in the ways that companies use product keys. As Web-delivered cloud-based software or "software as a service" makes some types of single-fee licensed software obsolete, product keys are becoming less of a common security measure.