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software licensing entitlement

Show Me the Money! Revenue Recognition Best Practices  (Part 2)
9 years ago

Show Me the Money! Revenue Recognition Best Practices (Part 2)

In my last blog entry (Show Me The Money, Part 1) we looked at a number of factors that play into software revenue recognition when a vendor (ISV) introduces electronic license enforcement into their product lines.  Part 1 focused on the principles and mechanics behind giving customers access to the software upon order execution so that the ISV may recognize revenue.   Part 1 concluded by bringing another key element into the revenue recognition equation: time.  Time can affect revenue recognition in a number of ways:

  • We have the time required by the customer to actually get their license keys after the ISVs claims to have given them “access” to the software.
  • We have the software’s ability to run by default without a license key for a temporary amount of time.  Does that count as “access”?
  • We have some ISVs selling perpetual entitlements but wanting or needing to deliver license keys that expire annually.  Does the customer really have access to what they bought?

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