Best Practices for Software Licensing Management, Software Monetization
March 15, 2012
By Beecher Tuttle, TMCnet Contributor
A robust software monetization strategy is more important now than ever. Tighter budgets, economic uncertainly, and growing availability of low-cost niche SaaS (News - Alert) offerings means that the ability to present customers with flexible pricing and packaging options is critical to winning new business. Equally as important is a software vendor’s ability to track, control, and bill for usage of their offerings. The later is dependent on the integration and deployment of software licensing and entitlement management systems.
More often than not, software vendors jump right into the technology implementation and skip the implementation planning and process design stage. As a result many organizations end up with a mess in the back office – disconnected systems and manual, time-consuming processes, all of which spike operating costs and take a hefty toll on customer experience.
Focusing on technology alone can be a mistake. More often than not, ISVs have more of a process and integration problem than they do a technology problem.
Taking a holistic, process-focused and strategic approach to software licensing management can give ISVs the tools necessary to improve the customer experience, grow revenue and even reduce operating expenses. This approach is discussed in detail in a recent white paper from SafeNet, maker of enterprise data protection and software monetization solutions.
Through its years of experience as a leading software licensing professional services company, SafeNet (News - Alert) recommends a few key tips to any ISV that wants to improve their licensing management process.
Build a Software Licensing Team and Appoint a Leader
Even though licensing is the lifeblood of any ISV, too many companies fail to appoint a competent director to lead the initial licensing decisions as well as manage the process post-launch.
License Managers are a critical component to any ISV’s business strategy and should be chosen with care. A License Manager should ideally have a strong customer background, an intimate knowledge of the field and come from the product management side of the business, says SafeNet.
Once a leader is in place, ISVs should work to put together a cross-functional licensing team that represents all aspects of an organization. Licensing decisions involve every department within an ISV, including finance, IT, product management and operations. Putting together a diverse team will provide a number of different perspectives and help organizations make the most appropriate licensing decisions.
Conduct Regular License Planning Sessions
One common pitfall for ISVs is what SafeNet calls the "set-it-and-forget-it" approach, where companies undergo license planning before launching a new product but never return to conduct reviews during the software's product cycle. This is a mistake. Conducting regular audits on the licensing of a product can help ISVs evolve with and react to the ever-changing market.
Focus on Sales Models, Operations and License Enforcement
Before even considering a technology solution, ISVs need to take a holistic look at a number of their business elements to assess and rework their overall licensing process.
- Sales: Involving salespeople in license planning sessions can help ISVs monetize their software in the best way possible. Open discussions with sales agents about how they are selling today, how they need to sell in the future and their opinion on the best manner of licensing for each product can go a long way in generating rich revenue streams.
- Operations: The next step is to assess the fulfillment and delivery mechanics of any organization – i.e., how an order travels through the company's system, from quoting and order entry, all the way through the customer notification process. This will involve identifying and reviewing different test cases to understand processes and customer experiences, and how they can be improved.
- Enforcement: License enforcement can take on very different approaches depending on the needs of each specific organization. ISVs need to have honest conversations about what is most important to their organization – whether preventing privacy at all costs or simply putting tools in place to keep customers honest – and then map out a vision according to their philosophy.
Following these simple steps can help an ISV create a clear picture of where their software licensing strategy is today and how it needs to improve moving forward. Only after these steps are completed can ISVs understand what technology – if any – is needed to improve the licensing management process.
SafeNet has the technology and consulting experience to help any ISV drastically improve their software licensing process. In one recent partnership, SafeNet streamlined a software company process by migrating the license key generation for all of its products into a single, automated and scalable platform. The end result was a much improved customer experience, increased revenue and a yearly savings of $500,000 from headcount reductions.
Visit SafeNet's website today to learn more about their award-winning portfolio of Sentinel Software Monetization Products and Consulting Services strategies and products.
Edited by Carrie Schmelkin
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