A unique volume license key (VLK) is provided to a volume license holder. A signed file containing the VLK and the data derived from volume license holder's submitted computing environment information is provided to the volume license holder along with the licensed software. The license file is stored in a central location, such as on an installation server, or locally on client machines, in a rather large file of any type. Upon logon, the license file is read, the data authenticated and the system is activated. If license data cannot be authenticated, a connected system either fully functions in grace period or run in reduced functionality mode until authentication succeeds. If the system is disconnected, the system is functional only with disconnected features until it joins a network again. In a completely off-line installation, the license file is generated by the volume license holder using software vendor assigned specific VLK and software vendor provided security hardware device. The distribution methods of software package, the VLK, and the license file can be flexible, including, but not limited to, single or multiple media.