Most of us see ‘software entitlement’ and think it’s just a ‘nice to have’ option. You know what else is ‘nice to have’ and ‘keep’ – customers. And we all know retaining customers is much more cost-effective than continually having to acquire them.
Just like a customer loyalty program, software entitlement provides data to better understand your customers. In turn, allowing you to offer customers targeted, high interest, high value packages that are easy to obtain and consume.
Brace yourself – we are leaving the world of perpetuity and moving into a constant state of evolution! End-users are in the driver seat now and what they want they are going to get – if not from you, then from one of your largest competitors or a small start up that is willing to sell them the services they need, for the price they think is fair. You can have the most sophisticated, feature-rich offering on the market, but if you can’t offer flexible pricing and licensing models you will never reach your maximum potential! So what does it take to be agile?
“The revolution will not be televised”, the singer Gil Scott-Heron once famously sang. I think he was trying to say that information and truth, cannot be packaged up in a nice “made for TV” special. In fact, by the time it’s happened, it’s probably already passed you by. I can’t help but feel this way about virtualization. We’ve been hearing the hype for years. No one denies the unbelievable impact it has had, and the value it continues to promise. This is not one of those technologies where you think “if”, it’s really more of “when” and “how”.
These days it seems like there are multiple opinions about the decision making process of CIO’s as it relates to software license acquisition, management, and their respective budgets. Multiple industry participants will wax eloquent on what the current generation of CIO’s will choose as their next move as a software acquisition strategy. Will they try to implement some sort of Software Asset Management tool to help them tag and track software which they have licensed (and as the argument goes, thereby reduce their expenses by only paying for what is being used if their contract allows for that), or will they go to a SaaS model where pay-per-use becomes a standard service model that achieves the same goal, albeit quite differently? View this article for one take on the CIO decision making process: http://www.siliconrepublic.com/strategy/item/17491-the-cloud-is-more-secure/
A common argument against DRM is that it punishes paying customers without successfully preventing piracy. Legitimate users are restricted from freely using the content or software that they rightfully own, while illegitimate users can still download the very same content, and use it without restrictions – and without paying the publisher.
At the highest level, there are two core ways issues with service agreement compliance will end up costing you, the service provider, a significant amount of money:
The software industry is in the midst of a dramatic shift. No software publisher big or small will be left unaffected by enterprise and consumer end-users’ growing preference to consume their software as on-demand services. According to industry-leading analyst firm IDC, by 2010 nearly 65% of new product from established ISVs will be delivered as SaaS services and nearly 85% of net-new software firms coming to market will be built around SaaS service composition and delivery. As a software publisher, the question you should be asking yourself is not how to avoid the cloud – but how to navigate a migration to the cloud for all or some of your applications as quickly and efficiently as possible. In a recent presentation, Saugatuck Technology’s Mike West made it quite clear that every aspect of an ISV’s business will be impacted by a shift to SaaS, from business planning and management, technology development and operational processes, and even corporate culture.
I don’t have many pet peeves in life. Okay, my kids will tell you I’m the typical dad who gets irritated when they leave the lights on in their rooms and monkey with the thermostat. But besides that, I roll with things pretty well.
Then comes perhaps my only work-related peeve: the misuse of the term “license”. I am sure it stems from my IBM days where teams of gifted lawyers spend oodles of cycles slicing, dicing, chopping and julienning seemingly simple concepts and produce software license agreements of Tolstoyian proportions.
You can’t be in a leadership role in the technology industry and not be involved at some level in the debate between pay-as-you-go and lump-sum type revenue models. Without question – lump-sum dominates the technology market space – for software – and for features-on-appliance (i.e. software). But the emergence of SaaS has opened up the debate.
The debate is quite heated. Opponents of pay-as-you-go say things like “it’s too complicated”, “enterprises won’t go for it”, “software vendors can’t convert to it”, “it’s a fallacy to think that SaaS uses pay-as-you-go”.
Often when talking to customers I find the conversation of licensing focused solely on ensuring compliance – that is to say, making sure that their customers don’t run afoul of their license agreement. That’s like buying a Ferrari and never getting out of 1st gear. Business intelligence is one of many over looked major benefits of a properly configured licensing and entitlement management system. Most would agree that reports from ERP systems are generally not flexible enough nor tailored enough to give Product Managers the information necessary to make intelligent decisions around the future of their product roadmap and packaging strategies. To fully realize the potential of your licensing system it is important to remember the business benefits of tracking the customer use of the license. At a basic level, as a product manager, I want a licensing system to provide me the necessary information to make these decisions: