Acquisitions are good, right? Sure they help your company grow, but what other baggage do they bring? Obviously, you will gladly expand your customer base and available resources. But what are you going to do about an inherited homegrown licensing system that is completely incompatible with yours? Read how one company expanded, without the additional headache of managing disparate licensing systems.
Sage is an international business software, services and support company working primarily with small and medium sized businesses. Throughout the years, acquiring other companies has allowed Sage to continue to expand globally. However, these acquisitions also led to multiple homegrown licensing systems that did not work cohesively.
Some recent articles I found online got me thinking about a post I made a little under a year ago – One Man’s License is another Man’s Poison. When I looked at it again – it took me a minute to figure out the chart.
Charts that take more than a few seconds to figure out are not very good charts.
So I decided to re-do it.
For many years I sold a Software as a Service (SaaS) only application. When selling to organizations there was kind of an unwritten rule. Small to medium size businesses would be resourced strapped and culturally more open to the idea of a SaaS application. Larger organizations would have dedicated IT resources and potentially feel threatened by outsourced applications. The conclusion was simple – the SMB market was much more fertile while when selling to larger organizations never forecast above 50% no matter what unless you heard from the CIO him/herself that they would be ok with a SaaS application.
Frequently I have the opportunity to discuss “software licensing costs” with ISV’s and device manufacturers in our industry. I always find it to be an intriguing discussion, and almost universally it seems that these companies view licensing as a necessary evil, not as an investment (let alone a strategic investment!). While there are multiple reasons why this could be (think of purchasing organizations and how they are measured), part of the equation undoubtedly has to do with the lack of concrete ROI metrics that are available around this technology, and the management of licenses and entitlements.
How do you know how much you are losing? How much is due to piracy? How much is due to unintentional piracy by organizations that want to be compliant, but aren’t due to a lack of enforcement? All of these metrics seem to be based in the psychology of perceived loss, as opposed to perceived opportunity.