Schaumburg, IL - 11/16/2009 - Flexera Software, the leading provider of software license, entitlement, installation, and application readiness solutions, today announced results from the 2009 Software Pricing and Licensing Trends Survey, the fifth annual assessment of key issues and trends on the minds of software vendors, high-tech manufacturers, and enterprise IT executives and managers. This year's survey of 306 participants, prepared jointly with IDC, found that software vendors and their enterprise customers are moving towards a preference for usage-based licensing, entitlement, and enforcement versus traditional licensing methods. However, while the survey revealed areas of converging opinion, disparities remain in how the parties view software entitlement and compliance management, as well as how well enterprises are able to track and monitor usage of those licenses compared to where they believe they are today.

“The 2009 Software Pricing and Licensing Trends Survey is especially noteworthy because despite some disconnects in how we get there, it reflects the growing recognition that usage-based licensing, entitlement, and enforcement models can simplify management and save money for customers while ensuring software vendors accurately and optimally capture the value their applications offer,” said Randy Littleson, senior vice president of marketing. “We believe the current economy and the need to control costs is fueling this trend, but that once adopted, these usage-based models will continue to increase in importance even as the economy recovers.”

“The survey shows there are some interesting points of agreement as well as disagreement between the publisher community and their enterprise customers,” said Amy Konary, Director of Software Pricing and Licensing Research at IDC. “Enterprises appear to want more choices, more flexibility in how they are allowed to license and consume software; software producers agree but seem to be limited in tools and technologies to enforce entitlements across all of those choices. According to the survey, both parties have a desire to move closer together with better insight and information into how software investments are being utilized.”

Key Findings

• Usage-based Monitoring on the Rise, But Appropriate Tools Not Yet Implemented: While 58 percent of software vendors report monitoring customer software usage, an 18 percent increase over 2008, the majority have only rudimentary tools to track usage, with 28 percent using home-grown tools and just six percent using robust third-party tools. Meanwhile, while 61 percent of enterprise IT managers believe tracking software usage is important or very important to reduce costs, minimize shelfware, and ensure compliance, most lack the appropriate tools to do so.
• More Flexible Licensing Preferred by Both Sides: In the last year, 43 percent of software vendors have adapted their software licensing approach to make it more flexible, citing improving customer relations, generating more revenues, and accelerating the sales cycle as their primary reasons. But they also say they lack the tools to support these strategies.
• More Choice in Pricing Anticipated, including Usage-Based Model: Software vendors overwhelmingly prefer Concurrent User (53 percent) and Seat (53 percent) pricing. Enterprises also prefer Concurrent User pricing (53 percent) but don’t like Seat pricing (10 percent). By 2011, 35 percent of software vendors expect to offer a usage-based pricing model.
• Growing Enforcement Disconnect Exists: Enterprises overwhelmingly prefer Network Licensing, but only 28 percent of software vendors currently use it. Meanwhile, 28 percent of software vendors still have no means of enforcement.
• Ready for an Audit...or Not: While 50 percent of enterprise IT respondents claim they are confident they could survive a software audit successfully, that leaves half of the respondents who believe they would fail an audit.
• The Over/Under Licensing Conundrum Continues: 53 percent of enterprises say some software license spend is associated with application over-use, and since this is a highly sensitive topic, these numbers may be low. On the other side, a very significant number, 76 percent, say there is a level of software under-use/shelfware.
• Value versus Price Perceived Differently: Only 45 percent of software vendors believe their current pricing and licensing strategies are effective or very effective at capturing the value their software provides to customers, while most customers are satisfied with the value they are receiving for the price for major application categories.

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