Back-office software technologies are an integral part of the back-bone that supports business. However, when the “enterprise” using enterprise resource planning (ERP) software happens to be a software company, back-office systems fall short of providing critical flexible support. Manual workarounds for processes such as recognizing subscription license revenue, reconciling entitlements, and dealing with a contract paper trail have been nearly good enough in the past, but fixing operations is a key requirement for many software companies.
The international Embedded World conference, which took place at the end of February 2013 in Germany, provided a strong indication that the traditional embedded market is changing. One theme run like a red thread through the show activities of many exhibitors: software monetization.
What is the reason behind this new focus? Vendors no longer concentrate on hardware development only; instead, the application feature side comes to the fore. With devices becoming more intelligent and connected through the Internet, the software required to enable a single device as well as a combination of devices is becoming quite complex.. For example in the automation space “intelligence” is becoming even more important, as it is “connectivity”. Both requirements are currently driving the demand of embedded software. Considering the fact that there are many more devices out there than people, the market potential is huge.
When I think of the word “integrate” there is a clear visual that comes to mind: two things fitting together and becoming something new. Fun fact about me: I love puzzles. My family and I spend many a weekend hour huddled around our puzzle table (yes, there is an entire table of the house dedicated to puzzles). We even have an upcoming Ask the Expert session on this topic titled “Integration Done Right – Using the Sentinel API’s,” which made me realize just how similar putting a puzzle together is to integrating your ERP and CRM systems.
In the last 10 years we have witnessed a shift from hardware-driven (60-70%) sales cycle where software was provided for free, to manufacturers seeking to leverage the software assets embedded within their devices in various ways, including monetization as well as using software to protect and control the feature set delivered to their customers.
The software protection business has matured at a slow pace over the past decade. The industry has gotten better at developing improved customer experiences through more sophisticated web portals and web services, but ultimately the model’s foundation relies on license file transfer between the vendor and the end customer.
The improvements in the area of cleaner customer experiences through web services has allowed some vendors to minimize a fair amount of the friction this style of license enforcement has introduced into the traditional delivery and deployment model.
What makes the most successful Internet companies so successful? They understand that the Internet is much more than a delivery channel – it is a customer feedback channel. So they get smarter every day, and improve constantly. Software companies have yet to capture this opportunity – today the Internet is reduced to the conduit for ESD (Electronic Software Distribution), or the live application (Cloud).
One of the most apparent advantages of hardware keys for software licensing over traditional software-based solutions is the ease of transferring a key, with its contained licenses, from one computer to another.
To prevent the use of illegal software copies, licensing systems typically use a mechanism called a ”fingerprint”, which holds unique hardware identifiers of the end-user’s computer hardware. The fingerprint is used to ensure that licenses bound to one computer cannot enable the software on another, or worse – on multiple computers.
In software licensing automation, there are generally two phases: the automation of the business processes for the software manufacturer, and the automation of the end user processes of activation and deployment.
Phase 1: Automating the Software License Delivery Process
How we get from receiving the order to delivering the software and access to licenses to the end user is what most people consider as the complete license delivery process. As a part of this phase, the user typically receives a download link to the software and the access codes needed for activation.
A topic I enjoy talking about is end customer experience. This is still a very much overlooked aspect of software licensing. We spend a lot of time talking about security and piracy protection, and we talk much less about how that security impacts the end customers, especially the legitimate ones!
In large scale software deployments, it is common for organizations to solicit the expertise of a professional services team to ensure a successful rollout. However, this happens less frequently in the case of software licensing projects. This is due in large part to the fact that expertise in all aspects of software licensing is not easily found. Unlike ERP deployments, when it comes to software licensing, requirements can vary dramatically from organization to organization.