By: Cris Wendt
When it comes to software license models, I sometimes feel like a singular Tweedledee and Tweedledum, the twin brothers in Lewis Carroll's Through the Looking-Glass, and What Alice Found There. I feel ready to wage a personal battle by promoting opposing perspectives on license models, yet the battle never happens. Like the two brothers with their opposing views, the confrontation never happens because the two views really complement one another and are not contradictory.
The issue is the license metric, the component of a software license model that is used to apply pricing. This is known by such names as "concurrent user", "named user", "Number of CPUs", etc.
At times I feel like Tweedledee by suggesting to companies that the license metric should be a way to create more price points to reach new markets or new customers and increase overall revenue. By understanding different usage profiles, it’s possible to expand a software license that is sold by, for example, named-user, and offer a different type of metric that allows the software to be sold by concurrent users. Such an approach may be used, for example, to take software that is used by a particular individual, and allow it to be affordably used by a wider audience of users as they may not all be using the license concurrently.
At other times, I feel like Tweedledum, by suggesting just the opposite. I sometimes tell companies that they have too many license metrics in their portfolio and that they need fewer of them. For companies that have a large number of software titles that are sold as a larger solution, the complexity of offering many different software license models for the various products can be counter-productive and confusing, especially for customers and channel partners. It’s actually easier for companies with a rich product offering to offer fewer license metrics and not more. This enables a wider portfolio of software to be more easily sold as a collective entity, rather than every product in a solution having a license metric to optimize for its use as a standalone tool.
As it turns out, both recommendations are complementary. When a software producer is small, it’s important to grow market share. By offering the product with more software license models, it’s easier to reach more customers at different price points. When the software producer is large and the solutions naturally reach a broader market, it’s easier to sell more software by making it simpler to buy more software. In these cases, fewer license model options that apply broadly across software titles are more effective.
This perspective reflects a natural lifecycle of software products in a market – over time your license models and product packaging will change to reflect market conditions. As you plan your product roadmap and associate licensing and entitlement management technology, be sure to realize that change will occur, and plan for it. And unlike Tweedledee and Tweedledum, you don’t have to wait for a big black crow to come down from the sky to make you realize these opposing perspectives on software license models aren’t at all at odds.
When it comes to software license models, are you Tweedledee and Tweedledum? Let us know!
In the meantime, check out my V-Smart Radio episode: Virtualizatioin: A Brave New World