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Gemalto Research says ISVs Need to Adopt Enterprise User Demands

November 09, 2015

There is little doubt that we are in the midst of a true paradigm shift when it comes to the ways in which, in an increasingly software-centric and driven world, software is created, protected, delivered and monetized. Independent Software Vendors (ISVs) to be successful need to adapt to changing customer expectations and requirements and transform the manner in which they deliver, track, protect and monetize software licenses and entitlements. These are just some of the findings in the release by digital software solutions provider Gemalto of its State of Software Monetization report.


Based on a survey done in conjunction with market research firm Vanson Bourne, the report looks at the opinions of 600 enterprise software users and 180 independent software vendors (ISVs) about the needs and challenges related to software licensing and packaging. The survey targeted ISVs with at least 10 employees and enterprise organizations with 500 or more employees from DACH (Germany, Austria and Switzerland), France, Japan, U.K. and the U.S). For everyone in the software value chain, the results are both timely and illuminating given the speed at which change is occurring.

The report documents how respondents feel about how enterprise software customer demands are evolving, as expectations created in the B2C world are now hitting enterprises. The big message is that ISVs and intelligent device manufacturers need to adopt flexible and adaptable licensing and packaging techniques to meet these needs and generate more revenue opportunities.

“The way that software is consumed is changing – whether users only want certain features, to use it on the device of their choice, or only want to pay for what they use,” said Shlomo Weiss, Senior Vice President, Software Monetization at Gemalto (News - Alert). “Independent software vendors (ISVs) have to keep up with the changing demands of their customers. We see that piracy, reverse engineering, and deliberate and unintentional misuse are all still monetization concerns for ISVs. However, now more than ever, delivering software in ways that customers want to consume it is critical for creating a user experience that sells.”

Meeting software monetization changing expectations and needs

Expectations from ISVs are high

A look at some of the key findings illustrates how things are changing.  For example, 85 percent of respondents think software vendors need to constantly adapt to evolving market needs. Plus, 83 percent of enterprise respondents said that flexible software packaging and accessibility across multiple devices are extremely important to them, and four out of five respondents believe that software needs to be future-proof to be successful. This is certainly a far cry from the way things used to be where rigid licensing and entitlement practices ruled.

What this need to constantly adapt to change is doing is to place significant software monetization challenges on ISVs. As the report says, ISVs – including intelligent device manufacturers – are facing issues involving monetization not the least of which are back office tasks and licensing enforcement. It notes that only one in ten ISVs responded that they face no licensing operations challenges.  In fact, with back office issues front and center, when asked about the challenges, the results were as follows: 

Source (News - Alert):  Gamalto State of Software Monetization report

Enterprise software users want more

As noted, the big underlying shift is that enterprises know that they need to be faster to market, faster in the market and more user friendly when it comes to the delivery and use of software. Recognition of the need to change with the times, and with some sense of urgency, are reflected in enterprise respondents expression of frustration with traditional, rigid software licensing, packaging and delivery options.  As the report explains about the responses, enterprises are looking for: online software delivery, metered usage and device-agnostic licensing.

The intensity of this is reflected in the results that only one in 10 enterprise respondents claimed that their organization is not experiencing challenges with their software licenses. Top licensing challenges that remain included inflexible license agreements, long customer on-boarding and lost licensing keys. In addition, noteworthy is the list of software license preferences. These included:

  • Enterprise licenses (59 percent);
  • Site licenses (45 percent); and
  • Concurrent-user licenses (40 percent)

Licensing compliance is a major issue

In terms of major challenges for ISVs, realities are that compliance globally is a primary concern. In fact, 80 percent of ISVs said they worry about unlicensed software use. Indeed, it is noted this is an increase of from the 75 percent who felt this way in 2012. Among unlicensed software usage, ISV respondents said that their top concerns were:

  • Competitive theft of intellectual property (59 percent);
  • Intentional licensing agreement violations (56 percent); and
  • Software piracy (48 percent)

Plus, 50 percent of enterprise respondents say they are currently non-compliant with a software agreement. When enterprise respondents were asked about how ISVs could improve their services they cited the following:

  • 80 percent think software vendors could provide more clarity around processes/audits
  • 72 percent think software vendors could improve usage tracking/audits

Commercial software monetization solutions are gaining traction

One final finding worth contemplating in terms of software monetization trends is that commercial solutions are becoming popular.  Roughly two-thirds of enterprise users who said they had implemented a commercial software monetization solution said they were up and running in less than six months. In short, ease and speed of implementation are attractive.

As explained at the top, there really is a paradigm shift taking place in software monetization that is impacting the way ISVs do business. It is based on their needs to be:

  • More operationally efficient and effective
  • The move to accommodate having greater visibility of usage regardless of where software is being deployed and used whether it be on-premise or in the cloud
  • Better security and intellectual property protection
  • The need for compliance
  • The requirement to be more flexible and enhance the user experience

And, maybe most importantly the absolute need to flexible to respond to changing user needs.  As Bob Dylan sings in his iconic song, “The times, they are a changin.”     




Edited by Kyle Piscioniere
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