Software Monetization Featured Article

12 Ways to Turn Licensing Challenges into Software Monetization Opportunities

August 10, 2015

In my profession, it’s not uncommon to get requests to write book reviews. In fact, there are days when I believe that becoming a full-time reviewer wouldn’t be such a bad thing—except, as the saying goes, you have to kiss a lot of frogs before you find your prince! Having said that, sometimes you come across a subject so compelling, that exploring it in detail becomes a labor of love.

For those of us with a passion for all things software—the problems that it helps solve, how it is created, packaged, delivered, protected and monetized—the recent eBook from Gemalto (News - Alert), 12 Ways to Turn Licensing Challenges into Business Opportunities, is certainly one to put on your must-download-and-read list.

We live in an increasingly software-driven world where software—whether provided as a service or embedded in hardware—has transformed into a major source of revenue. According to Gemalto, not only is software everywhere and running almost everything, but new business models are emerging that require vendors to adapt their offerings to meet the changing needs of the market. Being able to offer flexible payment models, manage entitlements, and control usage, as well as track and aggregate product-usage data to inform business decisions and enable continued innovation, are just some of the top software licensing challenges affecting software publishers today. Software publishers and device manufacturers who equip themselves with the right set of tools can expect to not only conquer these challenges, but also turn them into opportunities and grow their businesses in the process.

The following is an overview of the twelve most common software licensing challenges faced by Independent Software Vendors (ISVs). It explains why they shouldn’t be considered obstacles but rather opportunities to create sustainable and differentiated value, increase revenue, and gain a competitive advantage.

A dozen challenges and their impact (in no particular order)

  1.  Offer cloud-based access to applications and intelligent devices – Software publishers who want to leverage cloud technology are able to provision software, track entitlements, measure usage, and ensure compliance. They can accomplish all of this via pre-paid and post-paid business models.
  2.  Provide anytime, anywhere, any-device access – Putting end users in control of how they access your software is a great way of creating differentiated value.
  3.  Monetize intelligent devices – Software is used to control device features and functionality, thereby reducing inventory and operational costs.
  4.  Offer subscription and consumption-based pricing – “Everything as a Service” is gaining market traction. Software now has the ability to support subscription and consumption-based pricing models as a means to monetization. This requires tracking license entitlement information and collecting usage data for effective billing.
  5.  Collect usage data to improve business intelligence and billing – Publishers gain insight into what is used, by whom, how, when, where, and why. At the same time, this usage data visibility enables customers to only pay for what they use.
  6.  Enforce license terms in virtual environments – Successful license management not only requires support for licensing in virtual environments, but also the ability to enforce license terms once the application is deployed on a VM. Without enforcement, software publishers have no control over the license and, by extension, their revenue.
  7.  Prevent software piracy – This may seem fairly obvious, but you can’t make money if your software is being fraudulently used, whether intentionally or otherwise.
  8.  Provide customer self-service – Empowering users to perform certain tasks on their own can improve the end-user experience, dramatically decrease the number of basic requests coming into various sales support functions, and lead to greater customer satisfaction.
  9.  Integrate and automate the back office – Software publishers and device manufacturers who integrate a licensing solution with their back-office systems enjoy increased efficiency and effectiveness, as business processes become less prone to error.
  10. Protect trade secrets – Protecting Intellectual Property (IP) from outright theft or reverse engineering, while obvious, is a universal problem. It is therefore essential to ensure that you have in place the best risk mitigation capabilities.
  11. Provide secure and automated electronic software delivery – The days when most, if not all, software was delivered on physical media, are over. If your organization is not delivering its software in a secure, automated manner, with licensing and entitlement technology integrated with your electronic software distribution (ESD) process, you are leaving money on the table and exposing your business to significant competitive inroads. What’s more, deployment of such capabilities improves the software purchase and activation experience for end users and reduces operational costs.
  12. Support for mobile platforms – Just as our personal lives are becoming mobile-centric, so too are our workplaces. Support for Android (News - Alert), iOS, and Windows Mobile are table stakes for software monetization. 

That final challenge alone is one of the best reasons to move to a next-generation software entitlement and licensing solution. Users want software to follow them wherever they go, and they want to be able to pay per use rather than per device. They want the software to provide a consistent user experience across all their devices, particularly those personal devices they carry around every day. They also expect to receive a bill that’s both easy to understand and reasonable, based solely on actual consumption.

The long and the short of it is that while all revolutions tend to proceed at an evolutionary pace, the time when software was consumed on a perpetual license basis—where many requested features went unused—is fading fast, if not already over. In fact, there are many licensing opportunities to be had by implementing a comprehensive software monetization program such as Gemalto’s, with its state-of-the-art licensing, entitlement management, and security solutions. These opportunities involve almost every aspect of the value chain, from software creation to packaging. And because they provide better visibility into usage and compliance, their impact can be felt across all areas of an organization, namely in the reduction of operational costs and improvements to the customer journey.

As I previously mentioned, the eBook we’re giving away is more than just a good read; it’s an essential one for any ISV or device manufacturer looking to transform into a software-driven services enterprise.

Edited by Dominick Sorrentino