Software Monetization Featured Article

What's New in Entitlement Management?

June 08, 2015

It has been roughly six months since the last Gemalto (formerly SafeNet (News - Alert)) Licensing Live! event, and given how fast the world of software licensing and entitlement management changes, now seems like a good time to check in with Julie Armstrong, Director of Product Management.

The Sentinel products under Armstrong’s direction are;

  • Sentinel Cloud Services: A cloud-based licensing and entitlement solution for on-premise software and cloud-delivered services, providing usage data tracking and reporting.
  • Sentinel RMS: A robust license enforcement and enablement solution focused on scalable and flexible license management.
  • Sentinel EMS: A Web-based solution that provides software companies with a centralized tool for all licensing operations, tight integration to back office systems (CRM, ERP), and a variety of advanced data collection and reporting functions that can all be viewed through the deployment of a customized licensing portal.

What are the new market trends?

Armstrong shared her unique insights into the exponential growth of the software monetization market.

TMCnet:  Since we spoke late last year, what changes have you already seen in 2015?

Armstrong: At a high level, the term that best describes what is going on is “market relevancy”. In other words, our software monetization solution is very relevant to the needs of today’s ISVs. We hear a lot of buzzwords like IoT, M2M, SaaS (News - Alert), virtualization, and mobility, but what we can derive from this is that the world is becoming more and more software-centric. This means that a solid software monetization strategy is required. Licensing and entitlement management have always been important, but now improved licensing operational efficiencies, the ability to gather customer intelligence, cost reduction, and increased customer satisfaction are getting more attention and visibility at the executive level.     

TMCnet: Could you explain that a bit more?

Armstrong: Absolutely. In a connected world where the sale and delivery of software is online, the traditional one-time purchase model is becoming obsolete. We are transitioning rapidly into a world where software is delivered online, on a subscription basis, and in some cases, on a per-use basis. Indeed, the fact that end users only want to pay for what they consume is one of the main reasons that software monetization solutions are becoming so relevant. The end user gets better value for money and the C-level executive gains a better understanding of how their products are being used. At the same time, new revenue models are generated. It’s a win-win for everyone.

Businesses across the board are looking to transform in order to thrive in the digital economy. This means they want to integrate and align the “quote to cash” process more tightly with other back-end business systems. For this transformation to be successful, choosing and building the right monetization strategy – one that provides the technology platform and the ability to control the customer experience – is critical.

We have created an environment in our software monetization platform that allows you to start with what you need right now, and build functionality and operational efficiencies as and when you need them. Analytical visibility gets a great deal of attention as actionable analytics facilitate critical aspects of customer care and customer retention, such as proactive selling. This creates a more intimate and trusted relationship between the software provider and the customer.

TMCnet: A top priority of IT professionals, for obvious reasons, is protecting data. This means data at rest as well as on the move. With the IoT era just starting to gain traction, which aspects are coming into focus?

Armstrong: The focus is on security – not just protecting the IP and the software, but also the misuse of entitlements.

ISVs need to strike a balance between preventing unauthorized use of their solution and creating barriers to the ease of use and accessibility of their application. So, complex licensing schemes might offer greater protection, but also cause barriers for their end user that will impact customer satisfaction and possibly acceptance of the solution.

The ideal scenario is to protect with licensing in the most unobtrusive manner possible, so as to minimize or eliminate negative impact on end users. Where ISVs decide to fall on the scale of Protection to Ease of Use is dependent on a number of factors – value of the solution, the relationship with the customer, and what kind of data might be available to validate proper use. For example, some ISVs have open licensing agreements with corporations based on usage assumptions. Usage data can be used to validate whether those assumptions are correct so that corrective commercial arrangements can take place upon renewal time. Others have highly valuable and costly solutions where tighter control is far more important to ensure minimal revenue leakage.

TMCnet:  Are we making any progress on the culture front?

Armstrong: The short answer is yes; but change tends to be evolutionary. As device manufacturers see value in controlling solutions via licensing, many significant problems associated with abuse of the software on those devices start to disappear. Visibility on usage lets customers know what they have and what they’re paying for, giving them the upper hand when it comes to negotiating with software vendors.

TMCnet:  Finally, what do you see on the innovation front going forward?

Armstrong:  The reality is that with all of these solutions, there is the challenge of integrating back-office functionality. The most important thing a business can do to maintain its competitive advantage is to get back-office integration right, as this is what relates data to business.

One of the main areas customers should be investing in is the automation of business functions. In order to provide the best customer experience, we need to make licensing, entitlement management, and software monetization a lot easier for all concerned, especially the end customer. In fact, the objective is to ensure that the process of purchasing, activating, and monitoring a license requires as little intervention as possible.

Hiding the complexities of licensing operations from the end customer is one of our key design criteria – we are completely focused on automating the process and making it easy to use. You’ll see major advancements in this area in the coming months. At the same time, we also are focusing on making our solutions even more flexible. Every one of our customers has a unique requirement based on where they are in their software monetization journey and, ultimately, we want to provide a simpler yet more powerful way to engage with their customers, their partner ecosystem, and their vendors. Ease of use, customizability, visibility, and control is the direction we are headed in. That’s why so much attention is being paid to getting that mix right and the new functionality it entails.

After all, we must always be cognizant of the different audiences that get value from our solutions. ISVs need visibility into how their software is being consumed for all the reasons we discussed, i.e., to better manage their business, protect their intellectual property, build better products, and better serve their customers. Enterprise IT needs the visibility to know who, what, where, why, when, and how software is being used so they can manage their resources, ensure they are only paying for what they need, and can provide input on what they want. 

The nice thing is that C-level discussions about software monetization become a lot easier once their value is made apparent. This could be as simple as demonstrating the use case value of a solution that improves performance and gives end users the tools they need to be more productive.

Choosing and building the right monetization strategy is a business-critical decision for anyone interested in transitioning to digital commerce, adapting to trends such as the IoT, and driving incremental revenue by adopting new pricing models.

Armstrong shared the below chart with me, which provides an overview of The Software Monetization Hub.

Edited by Dominick Sorrentino
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