Software Licensing

More than half of the companies out there that deliver B2B software have some sort of electronic license management embedded in their products. The lion’s share of this market belongs to home grown technologies, an unsurprising fact considering that the one thing software companies do is create software. The pros and cons of build versus buy have been well documented, and isn’t the topic of this article. What mystifies me is the glaring lack of metrics when it comes to this highly pervasive and extremely important issue.

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SafeNet Inc. today announced that analyst firm Frost & Sullivan has presented the company with the prestigious Market Share Leadership Award for its leadership in the global software monetization market. Frost & Sullivan recognized SafeNet for its leadership in market share, growth outlook, continued commitment to the core business-to-business market, and focus on emerging cloud and embedded markets.

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The subscription economy has arrived and is here to stay. One of the key components of a subscription pricing model is the ability to charge against usage or essentially a pay as you go model. In the last couple of years, there has been a clear rise in the roll out of consumption based pricing models among ISV’s and SaaS providers. However, the interesting emerging trend is the adoption by OEMs, medical devices and classical hardware manufacturers who want to monetize on the software to gain a competitive advantage.

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In today’s tough economic scene where cash is king, everyone is being driven to conserve cash. As a result, buyers are asking for discounts from their vendors, converting from CAPEX to OPEX or license optimization or a combination of these. Any of these mechanisms can reduce revenue for the ISV. CAPEX to OPEX movement is of specific interest recently as this usually leads to discussions on pay-per-use and/or subscription pricing models. ISV’s typically think of migrating into SaaS offerings when they consider offering these new pricing models. Offering SaaS has its own set of challenges including requiring a hosting infrastructure, collecting payments, R&D efforts to build the new SaaS platform and its impact on current product roadmaps.

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Are you one of those ISV’s who think that you only need protection against software piracy or reverse engineering with no need for any kind of licensing? You are not alone – this is the common belief of most Independent Software Vendors. ISV’s believe that since they are selling their products through perpetual pricing models, their software protection and licensing needs are very simple and software protection is all they need.

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While ISVs continue the move from traditional dongle support to software licensing and cloud licensing, it is important to note that many software vendors still use dongles as part of their overall licensing strategy.  This creates an opportunity to improve how the back office functions for software activation, tracking, reporting, and license renewal, across all methods of licensing.  Having a unified back-office for licensing and entitlement management that includes support for dongle, software licensing and cloud applications would greatly improve how effectively ISVs manage their offerings.

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In today’s business landscape, virtualization allows for the removing of resources from physical assets and allows for business to be more agile.  Virtualization is by no means a new initiative.  Since its infant stages in 2005, virtualized servers have already been launched by most organizations, which are looking to virtualize even further.  In 2013 alone, the Virtualization Solutions market is expected to grow 12.3% year over year.

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Why is managing software upgrades so tough? It doesn’t have to be that way. There are a number of options for how you monetize upgrades and depending on which approach you take, there are different operational challenges and process requirements. Read More

One of the biggest challenges being faced by embedded device manufacturers is how to monetize the software component within their product offerings.

Historically, embedded end customers struggled with the idea that they were purchasing any ‘software’ when buying embedded equipment, even if it’s actually the embedded software that provides almost all of the great capability the end customer enjoys. They were simply buying a ‘box’ and that box did what they expected it to. Read More

Software monetization experts will connect on October 9^th and 10^th for SafeNet’s annual LicensingLive conference, being held this year in Cupertino, CA.  Now in its 8^th year, LicensingLive! has connected software publishers with peers, technology vendors, and industry analysts to discuss the latest software licensing trends, advice, and best practices.  This year’s theme, “The Evolved Software Experience,” focuses on how cloud computing has changed the experience consumers demand from their software, and will help guide how software vendors can provide an improved cloud-comparable experience while maintaining their hybrid portfolios.

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