At a recent event for SafeNet Amy Konary made an interesting comment based on analysis performed by IDC. On average end users of enterprise software felt as though they utilized only 30% or so of the availability of that application. That is, they were not getting benefit from up to 70% of the software’s features and functionality. (Amy please forgive me if I don’t have those %’s exactly right but it was in that range) The conclusion reached from this observation is that software should be better dissected so that people only pay for the pieces they want.
The conclusion seems logical enough but I’ve struggled with it ever since. Firstly, if it’s true, why have rational economic buyers still purchased software en masse? Many financial analysts believe that software spending was one of the first sectors to bounce back from the recent economic turmoil.Secondly, are there any other normally functioning markets that have similar traits? Lastly, why do end users on average only use 30% of the available capabilities?
As the head of new product development at SafeNet one of my key areas of focus is around bringing to market the types of tools and services ISVs need to help them manage the shift to the cloud – as you can imagine this means that I spend a lot of my time keeping an eye on what the industry is buzzing about!
I don’t know if they teach this in every MBA program, but I am sure you have heard that every business case can be boiled down to a certain number of “P”s. It is just a question of how many…some have 4 P’s, some have 5; but in this world of Twitter and brevity, I am going to go with the three that matter most when you think about creating licensing approaches for software: Piracy, Portability, and Profitability.
Most people in the US subscribe to bundles of TV content that is packaged through a 3rd party. There might be 3 or 4 tiers to an offer. A while ago, those people that packaged TV content for you also started to offer on demand services (or pay-per-view). Over the last few years – the ratio of the on demand to the all-you-can eat model has started to shift. Increasingly people use Netflix, Hulu, and iTunes to consume only the shows they want to watch (and usually ad-free too!). Read how an estimated 800,000 US households abandoned their TVs for the web.
The math is pretty simple. Most people are lucky if they spend less than $700 a year for cable. If you could buy only the shows you want to watch at $8.99 with Netflix ($110/year) and 15 must see shows at $40/season – $600. Together that adds up to about the same you might pay for an entry level subscription. If you watch more than that, go with your monthly plan. For a lot of people – the ability to just consume what they want is compelling and driving a big move towards pay-per-view. The internet and the iPad are also changing how you can get and watch content.
It’s not surprising that within the circle of licensing system vendors, one of the topics that comes up time and again is whether hardware-based (dongle) or software-based licensing is better. At SafeNet, we don’t understand the question. We provide the best-in-class solutions as all software, all hardware, or uniquely, as a hybrid licensing solution.
The list of pro’s and con’s regarding one solution over another is meaningless without understanding the context in which the solution is to be applied. I’ll try to correct the misinformation that’s out there about dongles. You can judge for yourself if you think I am biased, but since we offer every flavor of solution (dongle or soft), I don’t have anything to gain in this fight.
A great software licensing system combines automation of enforcement in the product with integration in to back office CRM, ERP, marketing and fulfillment operations.
Sentinel EMS from SafeNet provides the operational interface for licensing, and while it comes with a great web based user interface, it also comes with a whole host of web-services built in. The best way to automate the process from sale through the license lifecycle of the customer is to “wire” in the EMS system in to the different applications that run your business.
Customer experience, revenue protection, and resource optimization is top of mind for all organizations, including software vendors. SafeNet and Akamai have teamed up to provide software vendors with a user-friendly, secure solution for automating electronic software delivery (ESD).
By combining the back office licensing fulfillment and automation features of Sentinel EMS, SafeNet’s web based entitlement management platform, with Akamai’s industry-leading Electronic Software Delivery (ESD) solution, customers are able to improve the end-user software purchasing and activation experience while protecting revenue and reducing internal operating costs.