Every business will be a software business by 2020, says Frost & Sullivan (News - Alert). So now’s the time to prepare for this transformation, the research firm suggests.
The good news is that software-centric solutions and on-demand business models provide lower upfront costs and risk, and greater flexibility, for customers. For the businesses providing them, such solutions and models create a recurring revenue stream, and offer the ability to turn features on and off quickly and as customer and market needs demand.
"Business demands are constantly changing and having a software licensing solution that adapts to an organization in real-time is critical to staying ahead of the competition," said Shlomo Weiss, Senior Vice President, Software Monetization at Gemalto. "Agility and speed are crucial to business success, so being able to update products easily, automatically, and with minimum user disruption allows vendors to keep their customers up-to-date with their latest offerings."
However, the move to software also creates several challenges.
Part of the challenge is that selling solutions on an on-demand or usage-based basis involves a lot of variables. Many more variables than you have when you’re simply selling a box – which tends to be more of a one-and-done proposition. So there’s a lot more complexity in this new software-centric world, and that may act as a barrier to some organizations’ adoption of these new models, notes Avni Rambhia, principal analyst for the digital transformation group at Frost & Sullivan.
Counterfeiting, data theft, malware infection, and piracy are also more pronounced problems in the software world. But Rambhia says organizations can address all of the above challenges by adopting and implementing commercial software licensing, management, and monetization solutions.
Edited by Maurice Nagle