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Software Licensing and Delivery Options Too Rigid

By Michael Guta, Contributing Writer

A common theme prevailing in ICT is flexibility and scalability, because that is what is required to address the incredible demand of today’s ecosystem. However, a new Gemalto (News - Alert) research reveals software vendors and intelligent device manufacturers are not making the necessary adjustment by adapting their delivery models to the needs of their enterprise customers.

According to the report, titled, State of Software Monetization, there are great monetization opportunities if vendors adapt their licensing and packaging techniques. This includes delivering software ‘as a service’ so customers can access the resources they need no matter where they are, what device they are using or how many users are on at the same time.

“The way that software is consumed is changing – whether users only want certain features, to use it on the device of their choice, or only want to pay for what they use,” said Shlomo Weiss, Senior Vice President, Software Monetization at Gemalto.

The software monetization challenges ISVs face include back office tasks and licensing enforcement. The issues in the back of office include the cost of renewing and managing licenses by 87 percent of the respondents. Additional challenges were the time spent renewing and managing licenses, time and cost spent on non-product-related development and limited visibility into how products are being used by 83, 82 and 68 percent respectively. 

Weiss added, "Independent software vendors (ISVs) have to keep up with the changing demands of their customers. We see that piracy, reverse engineering, and deliberate and unintentional misuse are all still monetization concerns for ISVs. However, now more than ever, delivering software in ways that customers want to consume it is critical for creating a user experience that sells."

A key data point the report reveals is, four out of five respondents addressed the need to have future-proof software so they can be successful. With so many changes taking place in the development of hardware and software, this is extremely important. If enterprises and their users have to continuously purchase new products and services, the long term ROI will not be feasible.

As for the frustration enterprise users are facing, traditional, rigid software licensing, packaging and delivery options were the main culprit. Increasingly, they are looking for online software delivery, metered usage and device-agnostic licensing. With only 10 percent of the respondents claiming their organization is not experiencing challenges with their software licenses, a whopping 90 percent had some grievance.

The State of Software Monetization Report was carried out by surveying the opinions of 600 enterprise software users and 180 independent software vendors (ISVs). The ISVs that were targeted had at least 10 employees and the enterprise organizations had 500 or more employees from Austria, France, Germany, Japan, Switzerland, U.K. and the U.S.