Software Monetization Featured Article

Software Licensing: Many Stakeholders, No Clear "Owner"

April 28, 2014

There can be little doubt that the business of software licensing is in the midst of what can be described as a radical transformation. The days of Independent Software Vendors (ISVs) shipping disks are long gone. The need for speed to market and in the market, along with the use of online capabilities for things like upgrades, renewals, compliance and much more, have placed a premium on having a more  flexible and fast approach to the entire software licensing and entitlement management life-cycle. 

Having the best software monetization strategy and tools, which includes intellectual property protection coupled with real-time monitoring and tracking and sophisticated analytics, plus flexibility for doing this through interactions with on-premise licensing solutions or the cloud, are the keys to success.

The challenge that ISVs are facing is how do I get from here to there?  In this case with “there” being a versatile, secure and cost-effective software monetization environment that is easily managed and optimized for ISVs unique requirements.  

SafeNet (News - Alert) has literally defined a new era of software monetization with its Sentinel portfolio of software licensing and entitlement management solutions. I recently had the chance to discuss with SafeNet Principal Consultant, David DiMillo, how next generation software licensing is helping ISVs go to market and the challenges of getting them to what should come next.

TMCnet: David, since you are a consultant, let’s start at the beginning when you are talking to ISVs. They know they have problems, but how do you get them to go down the right path from the start?

DiMillo:  Most ISVs want to protect and grow their revenues. They want to put controls in their software and the user experience to better govern their business. We typically work with loosely organized teams that have been tasked with fixing the problem. Team members may or may not be representative of all of the potential stakeholders that will be impacted.

The challenge is they usually start by asking, “What technology can I integrate with my software to protect my revenues?” While technology is obviously important, and technologists ultimately have to implement a solution, in many ways they are starting in the wrong place. 

The reason ISVs come to SafeNet is because while they know they have a licensing problem, they also are aware that they do not necessarily have the expertise to solve it. Even if they have the technology skills they may not have the time, the mandate or the responsibility to quickly effectuate a solution. This makes this a technology discussion actually the easier part. 

What we and these teams quickly find out is that they have more of a process problem than a technical problem. Plus, because this involves literally everyone from across an enterprise—engineering, product management, marketing, sales, order entry, customer service, fulfillment, finance and technical support—this really becomes a business integration issue. That means a technology-centric look is not going to get them where they need to go. 

As the list of stakeholders shows, there are a lot of moving parts to be considered, and they all need to have a seat at the table for a strategy to be developed, responsibilities and accountabilities defined, metrics put in place and the fact that this is process and not just a project fully appreciated.   

TMCnet: Once there is recognition of this being process, what’s next?

DiMillo: What comes next is absolute key for success. The customer must identify who owns the project and the process.   

This is not as simple as it sounds. There are culture, budgets and current views of responsibility issues that must be addressed. For example, product management says we make products while IT says we focus on back office and don’t want ownership of the project. All of those other stakeholders are not in the business of delivering a product directly through technology. They want a say but not ownership. 

What we have found is that the companies that are most successful identify one clear owner. And, by that I mean one individual owns both the responsibility and accountability. Those who try to do this by committee usually struggle.  In fact, what is interesting, since we do not look to pick a project owner, is that experience indicates that regardless of LOB the leaders who are best are the ones who are most customer focused.

Especially in large volume situations, i.e., where for example thousands of seats need to be upgraded.  Solutions need to be intuitive, clean, work and enable customers to know where to go to get help. Product management for instance usually gets this. The goal is to create a bridge between all of the stakeholders along with customers.

TMCnet: So once there is recognition and an owner, what’s next?

DiMillo:  There are a number of steps but we start with defining the problem in a business context. We ask such things as:

  • Are you selling your products the way you want to or have to sell them? 
  • How do your sales guys want to engage to generate most revenue?
  • How do you foresee stopping customers from using more than they paid for?

We really try to understand what the customers want.  What they want to own and control. Plus, in many instances we are dealing with customers who started as hardware companies but realize that they have morphed into software companies.  We help them to figure out what they have, and help them visualize how it all fits together.  This as noted is about looking at process issues from quoting, to ordering, to execution, activation and management of licenses over time. 

We then get into scenarios. For example, what happens when a new customer buys something new?  What about when the same customer buys add-ons? What about new software releases and renewals? 

TMCnet:  What else is involved for getting customers to the best solution?

DiMillo:  We have an excellent white paper on the subject, How to Get Software Licensing Right- The First Time.  In it we outline the thirteen steps we use for implementing a project that covers the licensing project lifecycle. 

As you can see the emphasis is not just on technology integration but also on business process integration as well.

TMCnet:  So the keys to success are ownership and taking a holistic view as to how state-of-the-art software monetization that leverages the capabilities of a sophisticated licensing and entitlement management solution not only meets the challenges of providing better visibility and control to the ISV but also cuts costs and improve the user experience as well?

DiMillo:  The short answer is YES!  It also should be emphasized that successful companies do not look at licensing projects as projects, but as a program.  It needs to have executive buy-in, clear ownership, and at the end of the day should be something that all stakeholders view a part of their job. This is not just about solving a problem in a moment in time.  It is also about having the best tools available to continuously ask, “What can we do better?” In many ways that is the real value of things like our Sentinel product offering. 

Edited by Maurice Nagle
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