Story time. Some time ago I worked with a software company who was mostly convinced switching software licensing technologies would be in their best interest. One problem though: their hesitation was not around cost (financial investment, development effort, support impact, external and internal impact) but instead revolved around the thought of to giving their customers “double entitlements”. The concern was that each customer would already hold a set of license keys that would run the current and prior versions of the software and would *then* be given an additional full set of keys for the new version sitting on new technology, thereby doubling the number of software licenses their customers could potentially run. Sidebar: switching licensing technologies does not automatically result in double entitlements.
One of the inherent dichotomies for software vendors exploring new pricing models is: Who do you talk to? The common response is “Discuss this with your existing customers – they know best” There’s only one problem with that. Your existing customers have already most likely validated your current licensing processes – via the act of purchasing your software. To put it another way, when they looked at your pricing and licensing models they most likely found them to be agreeable enough (or at least not a big enough impediment) to moving forward.
The risk then as you explore new software licensing and pricing models is that you poll your existing customers only. While they’re an important constituent they should not be the only constituent. You need to look at the potential customers who did not buy your solution. Find out why they decided to go in another direction.
I have spent the last couple of decades working for (not just with) major ISVs as the person responsible for “making it all work”. I was the guy the executive team tasked with putting a plan together that showed how we could protect our revenue stream, how we could give customers tools to keep themselves compliant, how we could get better insight into understanding our customers’ product deployment patterns, selecting the right licensing models and policies, selecting the right licensing technology and vendor… all while somehow engineering a good customer experience without upsetting the apple cart. Sound familiar?