The rise of Software-as-a-Service (SaaS) over the past several years has led to an increase in the popularity of subscription software licenses. Subscription licensing pre-dates SaaS, but the cloud delivered nature of SaaS has naturally led to this increase in subscriptions.
At SafeNet we’ve seen this evolve in the past year where both enterprise buyers and software publishers are increasingly moving beyond subscription to a pay-per-use model for licensing software. We’ve seen this increasing demand for pay-per-use from our ISV customers who are delivering their software in the cloud, and from those that are providing on-premise software but who want to charge based on usage.
The IT industry is in the midst of a massive shift toward what IDC calls the 3rd Platform. The 3rd Platform is characterized by a proliferation of always-connected smart mobile devices coupled with the widespread usage of social networking, and layered over a cloud-based server infrastructure supporting important new workloads such as big data analytics.
The 3rd Platform is not just a technology revolution; it’s also a customer revolution. Unlike the previous generation of software, 3rd Platform applications will be designed for the consumer and enhanced for the enterprise. Consumer-like expectations for ease of acquisition and access as well as simplicity and transparency will dictate pricing models and payment terms. In addition, expectations for ease of use and interoperability will also be gleaned from consumer experiences.
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.
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.
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.
Guest blog post by Amy Konary, Vice President, IDC
For decades, success in the software business required executing on the following:
1. Make a Killer Product
2. Drive down Marginal Costs
3. Sell as many Units as Possible
4. Repeat Steps 1-3
Traditional software monetization models have been built to support this approach. However, today’s software customers are focused on using what they have, rather than buying more.
Over the last several weeks, I have been doing a fair bit of traveling. I found myself in the unfortunate situation of not having the use of my laptop for a few days while traveling internationally. Fortunately, I was traveling with a few key gadgets: my iPad, a cool iPad keyboard from Zagg, and my cell phone. I had almost everything I needed to get my job done and was able to get by well enough for the remainder of my trip. Although I am an avid iPad user both for business and personal use, this experience reaffirmed just how close we are in many ways to really being able to decouple ourselves from the traditional PC for many of the office- based work functions that most of us manage on a daily basis.
It’s easy to confuse authentication with authorization. The two are frequently used interchangably in conversation and are often tightly associated as key pieces of web service infrastructure. But the two are really two different concepts which often are completely divorced from each other. Authentication is the process where by an individual’s identity is confirmed. Whereas authorization is the association of that identity with rights and permissions.