The WSJ recently ran an interesting article on the key challenges of moving to the cloud.

“When on-demand enterprise applications emerged about a decade ago, they were touted as a cheap and more flexible alternative to buying software outright – a move that comes with upfront infrastructure and licensing costs, on top of ongoing fees for maintenance, support, and upgrades. But in practice, these promises have been hard to fulfill”.

There’s no denying that subscription and pay-as-you-go licensing are becoming increasingly relevant. However, their association with SaaS (Software as a Service) offerings hosted and delivered completely out of the cloud presents several challenges:

  1. From the ISV’s perspective, moving to the cloud often requires significant investment and may seem like a mammoth task.
  2. From the customer’s emerging perspective, this transition isn’t as agile as first thought. Customers are often required to enter into long-term contracts and changing supplier isn’t easy due to incompatible technologies.

What if there was a middle ground that allowed end users to leverage subscription and usage-based licensing, and at the same time, provided all the benefits of on-premise applications? Indeed, it is possible to control aspects of licensing and monetization in the cloud, while offering the application itself on-premise. As long as the application – and its data – remains on-premise, it continuously “talks” to the licensing server in the cloud; not only to periodically refresh the license but also to submit application usage data. This data is valuable for a number of reasons, namely generating business intelligence, integrating with billing vendors, and enabling usage-based licensing. Managing licenses in the cloud has the added benefit of instant provisioning, which lets you scale the number of licenses according to your business needs.

Many of our customers have successfully leveraged Sentinel Cloud to offer usage and subscription-based licensing to their customers. They have managed to counter the threat of pure SaaS models by offering customers what are essentially the same benefits, thereby retaining and growing their customer base. You, too, can offer your customers the best of both worlds; the benefits of on-premise applications along with license models that are prevalent in the cloud.

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