Technology has changed many industries in amazing ways. Transportation, manufacturing, healthcare—all have been transformed in the last decade due to increased collaboration, communication, and real-time access to contextual data facilitated by Cloud technologies, mobility, social networks, and analytics technologies. Despite being key enablers to advancement, technology software providers themselves have not always been at the forefront of using technology to transform their businesses from the inside out. However, pressure to transform is coming from all sides, most notably the outside–in. Customers are demanding change with their wallets. Cloud software is growing at more than five times the rate of the traditional packaged software market. By 2018, $1 of every $5 spent on software, and $1 of every $4 spent on applications, will be consumed via the cloud.

However, Cloud is not the only change driver that is shaking up the software business. By 2015, Ericsson predicts that there will be more global cellular connections than there are people. The rise of Cloud and mobility is impacting the software industry in several ways. Providing customers with anytime, anywhere, any device access to core enterprise systems, as well as the ability to interact with data to get work done, has become a key strategic imperative.

The software industry is moving away from device-based software licensing and towards user-centric models, even for software for which there is a clear connection between device count and value. For example, Microsoft Windows Intune, a device management solution, moved to a per user subscription at the end of 2012. Recent IDC surveys have shown that the per-user approach is now the customer preferred licensing method for device management solutions, reflecting the success of Microsoft’s approach.

With these changes, the value of software is shifting from the products themselves to the ability of the products to provide positive customer experiences.  Success requires the ability to build and deepen relationships with customers through the software. The more interactions (and points of interaction) customers have, the better the opportunity for building these relationships. Reducing the barriers to interaction—per-device licensing, pay walls, or complexity— are key for success in the software industry of the future.

In addition, we are seeing application providers extend access to core data and functionality to mobile devices. Part of the reason for the customer demand for anytime/anywhere is a desire to figure out how to do more with existing solutions. This should be encouraged, not resisted.  Even if not directly monetized, these mobile applications are helping to deepen relationships and drive revenues in adjacent ways—whether by increasing adoption of core systems or dragging through services revenues.

Finally, software providers that encourage anytime/anywhere access are demonstrating to customers that they understand the powerful benefits of Cloud and mobility.  The costs of not having flexible deployment and licensing models are a concern to many software providers that are weighing the revenue impact.  These include losing customers, or being viewed as a Luddite. It’s hard to quantify the impact for any one software provider, but it is safe to say that technology is enabling individuals and organizations to see many amazing benefits. Anything less than anytime/anywhere access can artificially stifle the realization of these benefits.

To learn more about the changes to software to support anytime, anywhere consumption, join me at LicensingLive! 2014 on October 21st and 22nd in Cupertino, California. Learn more about the event and register at http://www.licensinglive.com/events/licensinglive-2014/