Software Monetization – Pay as you go or Lump Sums?
You can’t be in a leadership role in the technology industry and not be involved at some level in the debate between pay-as-you-go and lump-sum type revenue models. Without question – lump-sum dominates the technology market space – for software – and for features-on-appliance (i.e. software). But the emergence of SaaS has opened up the debate.
The debate is quite heated. Opponents of pay-as-you-go say things like “it’s too complicated”, “enterprises won’t go for it”, “software vendors can’t convert to it”, “it’s a fallacy to think that SaaS uses pay-as-you-go”.
Proponents say it’s one of the “core ingredients of SaaS”, “people will adopt it”, “technology can solve the complexities”, “shelfware is a concern”, “it drives competitiveness and flexibility”.
Within SafeNet, our Sentinel Software Licensing & Entitlement Management BU members are proponents of the P.A.Y.G. models. We think that startups will adopt it because it creates a differentiator. We think that enterprises will want a mix of lump and P.A.Y.G. to help manage costs and planning and we believe that it can lead to more equitable measures and customer/vendor relationships. We don’t believe that established technology vendors can afford to ignore the model – and that at some point – some efforts are going to be required to enable it.
We surveyed many technology companies globally – and their customers. While all regions had slightly different responses – without a doubt interest in developing services from the vendors and buying services from the customers is high on everyone’s mind.
This month we kick-off private Beta of our new service www.sentinelcloud.com. Sentinel Cloud Services™ allows for simplified measurement and control of your software or service – so that you can easily provision, meter and ultimately bill for your product or service in the PAYG model. With that in place we plan to build on top to allow companies to manage a mixed portfolio of offerings – so that you can easily manage customers who receive a mix of products and services from you – PAYG or Lump or both. If you want to be involved – please sign up and apply. We are controlling initial participation – and will broaden the beta out in October – so if you don’t get in the first round – please hang on a little longer.
Our approach is a very open and SaaS/web friendly one. We have API’s for your products and services – and API’s to link your existing systems and services in to ours. Sentinel Cloud Services allows for simplified measurement and control of your software or service – so that you can easily provision, meter and ultimately bill for your product or service in the PAYG model. Our overriding goal is to make it low to zero touch on your products and services after deployment – so that you can add/change/delete and manage different offerings without recourse to R&D. With that in place we plan to build on top to allow companies to manage a mixed portfolio of offerings – so that you can easily manage customers who receive a mix of products and services from you – PAYG or Lump or both.
We look forward to seeing you in the cloud.