Software Monetization Featured Article

Top 5 Things to Look for in Software Monetization for 2015

January 06, 2015

In looking back over the past year in Software Monetization, it has been one that can best be characterized as transformative. For Independent Software Vendors (ISVs) this was a year of increased recognition that the old ways of doing business were not going to be sufficient for success. In fact, as a result of the perfect storm of the cloud, security, mobility and compliance and the need for speed in creating and delivering not just new products but new services based on new business models, increasingly it meant understanding the urgency of moving to solutions in two important ways. 

The first was to provide better visibility over their entire environment as it relates both to customer facing activities as well as back office/work flow ones. The second was having tools and options to be able to smoothly transform their businesses to a world that will be user-centric rather than hardware-centric. Both highlight the need to invest in next-generation licensing and entitlement management capabilities, particularly as we move deeper into the Internet of Things (IoT) era.

I saw all of this is terrific detail at SafeNet’s (News - Alert) annual Licensing Live! event, and would urge you if you did not attend to keep an eye on this space for links to details about next year’s event.  In one of the sessions that fascinated me was The Evolution of Software Monetization in a Connected World, which was done by Shlomo Weiss, SVP and General Manager, Software Monetization, SafeNet.  In fact, as the year comes to a close, it seemed like an opportune time to ask Shlomo to take a look ahead at what he and SafeNet think will be major trends in 2015 and beyond.  I added the “beyond” since while the world likes to think everything that goes on in tech is revolutionary, the fact of the matter is no markets happen overnight. However, as Weiss pointed out, 2015 is certainly going to see a major acceleration in all of them.

An exciting year ahead

Below in no particular order of importance are Weiss’s top 5 areas to watch in 2015. They actually more appropriately are areas where software monetization opportunities will arise and they are highly interrelated. If nothing else they point to what is going to be a very exciting year not just for ISVs but for all of the stakeholders in IT world accelerating to being even more software-driven for literally “E”verything.

Market Dynamics and Business Models:  This is aimed at ISVs. It has to do with how fast the market is changing and how quickly it will accelerate in 2015. Weiss noted that one of the things to really keep an eye on by ISVs is that subscription and usage capabilities have relied on an assumption that you had to be a SaaS (News - Alert) provider.  As he pointed out, the reality is the provider could be anyone.   

Customer Experience (improvements for ISVs and their customers):  The good news for ISVs relying on next generation software licensing and entitlement management capabilities such as those provided by SafeNet is that having better visibility over how their software, whether premises-based or in the cloud or what is most likely a hybrid scenario, is not just good for ISVs but is good for their customers.  ISVs get a wealth of knowledge about product usage (which can be used for planning purposes) and license status (renewals and upgrades) while users get a view of who is using what, when, where, why and how. And, equally as important, IT departments get a better handle on being able (relating back to the first point about business models) of only paying for what is actually used and not paying for capabilities that go untouched.  

In addition, Weiss pointed out that this is more than about managing shelf-ware it is about licensing life-cycle management without the need for IT teams to manage the software keys because the process is totally automated and transparent.  As a result, SafeNet firmly believes that a better understanding of customer behavior allows for better products and more satisfied customers on a number of levels.

Ecosystems:  The development of ecosystems as a trend will become even more important than it already has been because no single vendor can provide a complete solution, particularly as we get into (see below) the IoT era.  In a pervasively connected world, it takes an ecosystem to deliver a complete secure software-driven connected environment.  It is as Weiss explained; the justification as to why software licensing and entitlement management needs to be a foundational consideration in any overall IT-centric business transformation.

As Weiss noted, this is becoming more and more important as more and more capabilities need to be integrated for organizations to achieve operational efficiency and effectiveness, securely and in a timely manner. It means dealing with such things as new billing systems that are based on usage, back office automation integration regarding ordering, fulfillment, service maintenance, etc. It means using entitlement management as the glue for getting further value out of ERP and CRM systems.  It means having a trusted ecosystem from a go-to-market perspective will be critical in 2015 and only increase with importance over time.  

Getting ready for the impact of IoT:  This one in many ways is self-explanatory.  In a world where there are billions of devices connected, software is what gives them value—be it embedded in systems or as part of security, big data and analytics or tied into various other systems regarding customer interactions as well as product development, sales and marketing.  As Weiss explained, if you are in the IoT space you need to recognize that what you are doing today will change. It means evaluation and implementation of an infrastructure that has the flexibility going forward.  He noted that, for example, hard coding does not allow flexibility to react to change.  Companies that wish to monetize IoT opportunities will need to invest in scalable, secure and resilient solutions that serve them well in 2015 but can serve them even better over the longer-term.  We will start to see an acceleration of those investments in 2015.  

The importance of security:  This was last and as recent headlines have shown in many ways may be the top priority for everyone in the software value chain.  Weiss noted that SafeNet’s core competency is in the protection of data on the move and at rest, and that protecting code, making sure people and devices are authorized was at the heart of how and why software licensing and entitlement management we not just the vehicles for companies to grow, but also how to grow while at the same time limiting risks. Again, the spotlight in 2015 is going to be on ISVs and their customers taking a much closer look at solutions that protect data throughout its lifecycle but this is a case of constant vigilance and improvement and 2015 is going to see significant innovations introduced in this area.

As noted at the top, these predictions have legs. Yes, 2015 is going to see an acceleration in monetization opportunities for the reasons cited, but they are really setting the stage for software licensing and entitlement solutions to become much more than an afterthought is strategic discussions by enterprises and much more important as tools for the ISVs who serve them in a rapidly changing world. 

Edited by Maurice Nagle