The old software licensing models are changing rapidly. It's no longer acceptable to offer one software license model to fit all customers. Business and consumer customers demand that you do business the way they want. In fact, market pressures are increasingly driving enterprises to a pay-per-use mentality.
Along with rethinking software license models, software vendors are rethinking the way they do business. From the front-end with new ways to license their products to the back office, where the entitlement management (the operations that identify what level of support, maintenance, and upgrade a customer is entitled to receive) has been done by hand or with less-than-adequate homegrown entitlement management systems.
You want to:
- Reduce time to market
- Minimize risk
- Increase product flexibility
- Achieve faster time to value (faster deployment)
- Enable competitive advantage
Software perfect storm - software licensing caught in the middle
But there are competing pressures you need to understand as well.
- Single-digit growth and consolidation
With an uncertain economy, profitability will focus attention on new ways to bring products to market quickly and cost-effectively to sustain revenues and profits, leverage and fully monetize intellectual property to maximize licensing revenue, and effectively manage disparate licensing schemes from acquisitions/consolation to ensure revenue recognition.
- Subscription vs perpetual license model
Subscription license models will become more important as software vendors move toward more predictive, quarter-over-quarter revenue flow. This will make the implementation of software licensing technology into existing product lines essential so that software vendors can profitably deliver these shared and time-based licensing.
- Better software compliance, software piracy tracking
The drive for profitability means stemming revenue leakage and piracy. This requires an accurate view of how customers use your software. Unobtrusive and mutually beneficial, the right entitlement and compliance management solution gives you the opportunity to monetize overuse and unauthorized use, while your customers gain a clear understanding of their own usage - all without the intrusion of physical audits.
- Electronic software delivery
Analysts have predicted that the majority of enterprise software and 80% of all consumer software will be delivered digitally within a few years. If you are not prepared now, you will need to create the infrastructure that enables you to meet this trend and remain profitable.
- Software as a Service (SaaS)
The lines between software and service are blurring, especially with Software as a Service (SaaS). In addition to empowering producers/manufacturers to go to market faster with lower risk, SaaS offers software vendors a way to significantly reduce - even eliminate - their IT capital expenditure (CAPEX) for a consistent and predictable operational expense (OPEX).
Solving the challenges: think differently about the software business
A best practice for solving these challenges is to have a reliable software licensing and entitlement infrastructure that fully supports your software licensing models today, but enables you to quickly re-tool and respond to customer or competitive challenges. Look for comprehensive software solutions that provide a consistent, automated solution to manage entitlements. With the right software license and entitlement management solution you will reduce the risk of non-compliance and software piracy. As customers demand more convenience, you will want an infrastructure that enables the convenience of secure, fast electronic software distribution as well.
Flexera Software solutions help simplify software licensing, software delivery, technology, support - and they reduce your operations costs. While you may currently have a home-grown solution to manage software licensing, these typically become expensive to maintain and a nightmare to adapt to changing licensing schemes, new business models, or different markets.