System and method for differentiated cross-licensing for services across heterogeneous systems using transient keys

A system and method for guard point licensing is provided. Licensed software executing on a storage system is modified to include one or more guard points to ensure that appropriate licenses have been obtained by a customer. During initialization of a guard point, a management system obtains a first random number (R1) from the first system and passes R1 and an application specific context command to the second system. The second system returns to the management system a pass phrase and a second random number (R2), which are then forwarded to the first system. The pass phrase is a data structure identifying the system that generated the pass phrase as well as containing the application specific context command. The above steps are then repeated with the first and second systems inverted.