Software Monetization Featured Article

Mobility and Cloud are Transforming Software Development and its Monetization: Part 1

February 19, 2013

The accurate, timely and secure monetization by independent software developers (ISDs) of their intellectual property has always been a priority. However, as a result of the emergence in the past few years of app store-anchored ecosystems, HTML5, the explosion of smart devices for business as well as personal use (a.k.a. BYOD), the cloud as a delivery system and consumption platform (SaaS (News - Alert)), and the move toward subscription-based licensing, the challenge of having the proper software monetization tools has never been greater. Fortunately, the availability of solutions for addressing licensing and monetization issues are keeping up with the rapidly changing world ISDs play in.

With 2013 shaping up as a watershed year for ISDs, it seemed like an ideal time to check in with Alan Zeichick, Editorial Director, BZ Media’s SD Times, one of the software industry’s premiere experts. Talk about being tuned in and turned on, SD Times reaches more than 65,000 project leaders, architects and development managers in 119 countries. While our conversation ranged across a broad spectrum of issues for ISDs, the focus was on what appear to be the two biggest tech trends that are reshaping the market, mobility and cloud. And, rather than attempt to squeeze too much insight into a long piece, this will be the first in a two part look that will concentrate on MOBILE.

Mobility software development game is changing

After going over what we all know at a high level regarding how the emergence of smart devices, their incredible saturation of the market worldwide, and the impact the bring your own device (BYOD) phenomena has had in terms of creating a tidal wave of new software and apps, Zeickick and I discussed the topic of “disruption,” i.e., is there something looming on the horizon for this coming year that could be a game changer? I received an interesting history lesson, and an intriguing answer to the question about whether there was something ISDs and those who help them monetize their creativity should be on the lookout for.

First the history. Zeichick noted that as we have all been living through the iOS and Android boom, which now seems like ancient history, but which arguably got kick-started in June of 2007 with the introduction of the first iPhone (News - Alert) and accelerated with the 2010 appearance of the iPad. From an ISD perspective, development of mobile apps has been pretty focused.

He noted, “It used to be there were two types of folks that built mobile apps that could be readily monetized. First there were the “gamers” who put them up for sale on the app stores and/or used the free versions for ad insertions to drive traffic to premium capabilities, and those developed personal utility tools for the mass market. And, there were those who developed apps because they saw mobile as a point of entry into the enterprise space that would enable companies to augment, if not replace, their websites.”

Now for the intrigue. What Zeichick said he increasingly is seeing—in no small measure driven by the sea-change in attitude from IT professionals whose managers (many of whom are literally running their businesses from their tablets) are convinced that accommodating and leveraging BYOD is the path forward for success—that “companies see mobile apps as a means for creating new customer value.” He continued, “This is about better servicing existing customers as well as creating whole new product lines. These are not just part of a customer service portal or designed as website replacements, but are entirely new revenue streams, and we are already seeing this in the healthcare industry.”

What this means for ISDs is that a huge opportunity is emerging. As Zeichick says, “This may still be under the radar screen in 2013, but it will not be chump change.” Indeed, IT’s accommodation of BYOD and its need to properly manage and secure the enterprise to take advantage of beneficial business optimization applications is gathering momentum.

What this portends for ISDs in terms of monetization is a need to take a hard look at business models. The primary consideration for ISD’s is likely to be the move to cloud-based monetization solutions offered by companies like SafeNet. These not only off-load the arduous chores of tracking licenses and managing entitlements, but also provide a host of additional benefits such as lowered operational expense and improved business intelligence. Broader reach for ISDs is a nice problem to have, but better control over back-end processes is also a necessity.

Whether it is due to third-party apps for enhancing the value of existing communications platforms for things like contact center and unified communications capabilities, customized applications developed by channel partners, or even custom apps created for enterprises by third parties and presented as their own, the reality is that enterprise app stores and ecosystems are going to proliferate. With proliferation will come myriad business relationships to be established, monitored and monetized.

As Zeichick says, “2013 is going to be a very interesting year.” It sure looks that way.

Edited by Stefania Viscusi
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