Simple were the days when only perpetual licenses were sold, and each ISV decided on one locking criteria to build their price model around – like CPUs, cores or dongles. Add floating/concurrent licenses, and a volume discount plan, and you had a price list that was pretty straightforward. It was straightforward for customers, sales reps, customer services, configuration management, etc. Those days are long gone it seems; ISVs need to offer an ever-growing variety of software licensing models to keep up with customer demands and competitive pressure. Subscriptions, pre-and post-paid, usage-based licensing, capacity licensing, machine- or user-centric licensing (license follows the user) – the list goes on. Each license model makes a lot of sense for someone, so where should you stop?
One of the best parts about buying a new car, other than getting a new car, is that you can get the basic model plus a long list of extras. Often certain packages have been designed that include the basic model plus a certain set of extras: the “sport” model, the “winter” edition, the “luxury” package etc. You can start at a lower price point and then just add the extra features you want, without adding or paying for what you don’t want or need.
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.
What makes the most successful Internet companies so successful? They understand that the Internet is much more than a delivery channel – it is a customer feedback channel. So they get smarter every day, and improve constantly. Software companies have yet to capture this opportunity – today the Internet is reduced to the conduit for ESD (Electronic Software Distribution), or the live application (Cloud).