Software Monetization: The Only Constant is Change
Listening to the presenters at last month’s LicensingLive! conference, I couldn’t help but think of the commonly used expression “the only constant in the industry is change.” The software market has been undergoing fundamental change for a number of years now with the rise of virtualization, cloud computing, SaaS, and mobile. What stuck out at the conference is how these changes are affecting the way software companies of all types are approaching how they do business.
Speakers at the event, which included industry analysts and software company executives, addressed several common themes that are transforming the business dynamic of the software industry:
- Anywhere, Anytime Access: end customers expect access to software applications from any device at anytime, whether deployed on-premise, in the cloud, or across hybrid environments.
- User-Centric Licensing: with end users accessing software from any device licensing mechanisms need to evolve to become user centric, meaning license delivery and enforcement based on who is using the software and not what machine it is being accessed from.
- Usage Tracking: the growing demand in the market for pay-per-use licensing models is driving ISV’s to implement capabilities to track and aggregate usage data to enable pay-per-use and business analytics. This increasing demand for pay-per-use is not just for consuming software from the cloud, but for software delivered on-premise as well.
- Common User Experience: end users expect a common licensing experience, not matter how or where they access the software from. From the user’s perspective the licensing mechanism should be consistent across on-premise, cloud, and hybrid environments.
These trends are causing software providers of all types to re-think their approach to monetization. I had numerous discussions with a variety of software providers at the event and I found three scenarios that emerged from those conversations:
- On-Premise ISV’s are transitioning to offer “cloud-like” and usage based business models for their on-premise software, and many are developing service delivery capabilities in parallel.
- Device vendors who sell hardware that is enabled by software are looking to increase the value of their offerings via more effective software monetization.
- Pure-play cloud software providers are beginning to segment their offerings and adapt their business models as they evolve and continue to mature as companies.
The event really validated what we in SafeNet have been seeing from our customers and partners around the world – the software industry is undergoing fundamental change, and ISV’s need to adapt their software monetization strategies to capitalize on the changing business dynamics.
Check out the presentations from the event here. You’ll see videos from the event that presentations from Analysts Ray Wang of Constellation Research, Amy Konary of IDC, executives from Aveva, LogiAnalytics, and others.