Entitlement and Compliance Management

Distributed Management Task Force Helps Develop Cloud Licensing Standards

By: John Lipsey

Today Flexera Software announced that is has been asked to join the Distributed Management Task Force (DMTF).  The DMTF is an industry consortium that brings together technology developers and their customers to collaborate on industry standards.

Flexera Software will be joining a veritable who's-who list of Cloud computing heavy hitters to help develop standards on licensing, distributing usage reporting in the Cloud.  This is critically important, because currently there are a plethora of unanswered questions about best practices for licensing software in the Cloud from an application producers perspective; and managing Cloud licensing and entitlements from an enterprise perspective.  And for the Cloud to gain commercial footing and mass uptake, requirements for interoperability between application producers, enterprises and Cloud-based managed service providers, must be answered.

It was an honor to be invited by DMTF to join their software license management incubator. It underscores Flexera Software's unique role in the industry as a leading provider of application usage management solutions for both application producers and their enterprise customers.  We're looking forward to helping tame the 'wild west' that currently characterizes licensing in the Cloud.

To learn more about Flexera Software and the DMTF, check out the Developing Cloud Licensing Standards video.

 Jeanne Morain, Director of Strategic Alliance, Flexera Software

Don’t Put Your Software License Business in Jeopardy – Entitlement Management BI has the Answers

By: Chris Wendt

I found a way to beat Jeopardy, especially when my software license business is at stake. When I need answers, I found that I only need to ask the right question, "What can a COTS software licensing and entitlement management system do (provide) for me that an ERP or a homegrown system can't provide?"

Software entitlement management systems are an integral part of protecting your organization's valuable IP, generating licenses, and providing the customers with a nice self-serve portal to manage licensing and compliance. But, such a system can also provide you with valuable information from which you may be able to tune your business.

An entitlement management system is often integrated with other systems such as CRM, ERP, and LDAP to perform the operations backbone for all business processes. An entitlement management system is also the system of record for software downloads, and license key generators and can provide valuable information for improving processes and increasing revenue.

Consider the following, "What can a COTS software licensing and entitlement management system do (provide) for me that an ERP or a homegrown system can't provide?"

• Determine channel velocity, or, sales effectiveness through a channel –determine the elapsed time from when an order is shipped to a channel partner, to when it is eventually activated by the customer to find interesting patterns in different partners and partner processes, helping you to improve the time to revenue, and perhaps increase revenue.
• Measure the effectiveness of new upgrade campaigns by measuring the time it takes for customers to activate new versions of products from the time the release is made available.
• Establish support business readiness parameters for support by knowing, based upon the historical time from shipment to activation, when you may receive the bulk of support calls regarding features/functions in the new release.
• Find where piracy may be occurring, or, where there are up-sell opportunities, via standard reports to determine which licenses are activated multiple times, or attempted to be activated multiple times and establish patterns.
• Find sales opportunities by looking how many demo license activations actually convert to revenue licenses, and, if in the process there are patterns around channel partner, geography or type of user that allow the tuning of such programs.
• When selling through a channel, get more real time-data on which products are selling best by looking at product activation reports.
• By viewing activation reports in an indirect sales model, tune up-sell programs by knowing which combinations of products are actually used in combination, and correlating that to geography, channel partner, or type of customer.
• By viewing patterns in activations for new product releases, determine how many products are still active for obsolete or end-of-life products, so that you can determine the need to create a campaign to migrate these customers to new releases?"

So, are you ready for some Jeopardy? If you need answers, just ask the right question, "What kind of business intelligence can I get from a COTS entitlement management system?"

Machine-to-Machine (M2M) Has Evolved

By: Steve Schmidt

Everywhere I turn, I seem to run into another interesting opportunity to drive more value out of Machine-to-Machine (M2M) initiatives, so I thought I would share some of my thoughts on M2M. First, a common definition of Machine-to-Machine (M2M)…

Machine-to-Machine (M2M) refers to technologies that allow both wireless and wired systems to communicate with other devices of the same ability.^[1][2] M2M uses a device (such as a sensor or meter) to capture an event (such as temperature, inventory level, etc.), which is relayed through a network (wireless, wired or hybrid) to an application (software program), that translates the captured event into meaningful information. (Source:  http://en.wikipedia.org/wiki/Machine-to-Machine)

The initial focus of M2M, and the one that continues to get a great deal of attention because it is foundational, is the creation of a connection from a machine/device to another machine/device.  Connecting devices in a one-to-one fashion was the starting point, and then connecting them in a networked manner.  This assumes the device is "intelligent" -- meaning that the device can process information in some way.  Making the device intelligent and finding a way to connect it are still key steps, but that is just the beginning.  The real value is in what type of data is sent over the connection and what is done with that data. 

The primary benefits of M2M have historically been the ability to better support remote devices, e.g., knowing when a pump is close to failure and needs to be replaced, when restocking is required in a vending machine or when a system is running old software.  Additionally, M2M helps reduce the support costs associated with the maintenance of the device.  M2M can circumvent the need for manual inspections, and can also speed up time to diagnosis and ultimately resolution.  Customer satisfaction improves in this scenario as well, as they continue to receive uninterrupted benefit from the device.

The breadth of use cases and benefits of M2M is expanding, to include new ways to monetize the offerings from the device vendor.  A wide range of opportunities open up when the M2M connection is used to share usage data from the device.  For example, it enables new business models to be implemented – these can be business models that are more lucrative in general and/or more appropriate for specific sub-markets.  For example, users of a device can be charged based on number of discrete uses, or usage levels during specific times of the day, or a concurrent number of users within an enterprise, or based on geographic location, or use of specific features… or any number of parameters.

This data can also be aggregated and analyzed for improved business intelligence.  Seeing patterns of usage consumption can lead to focusing new sales activity on the products or features that are most highly valued, and in the most receptive markets.  It can lead to targeted marketing campaigns that up-sell users to new levels of functionality or renew them at the most opportune time.  It could focus development on the most valuable features, on the most widely deployed platforms.  It could be fully anonymized and provided to others to be leveraged in their databases, marketing activities, or support services.

M2M has evolved to encompass and enable high-order value propositions, driving increased revenue.  Maturity models presented by Gartner, Sprint, and others at recent M2M conferences reflect this evolution.  They generally depict the major steps of connectivity, support enhancement, and then additional monetization.

Next time we'll take a look at a few tactical ways to more fully leverage M2M.

Document Your Software License Compliance Philosophy

By: Cris Wendt

If you sell software licenses, has your management taken the time to document your company view on software license compliance? If not, it may be time. Your views on compliance and the associated mechanism you choose to enforce compliance will affect top and bottom line revenue as well as your customer experience.

The software market is certainly maturing and evolving when it comes to understanding richer and more nuanced views on software license compliance and enforcement. In fact, if you talk to different individuals within a single company, it's enlightening to discover that many of them have slightly different views on compliance and enforcement, and they often describe their individual views in such a way that they make it sound like it's the corporate position.

Within a single company, I hear such diverse positions as:

"We trust our customers and need to stay out of their way. Our enforcement behavior should just consist of providing some usage reporting that the customers and our sales force can use to have a conversation about pricing."

"We can't let our customers use software they aren't entitled to use! If they don't have a license to use software, then we should have an enforcement mechanism that shouldn't let them use the software until they pay us!"

"We can just suddenly shut down a customer if they're using our software and need additional capacity. For enforcement, we should have license technology that allows them to use some "over-draft" for awhile, and then we should shut them down after providing plenty of messages."

It's good to hear such diverse views, because a single software company can sell to a variety of customers in different markets where the customer behavior toward license compliance varies. Just like products can be targeted to different market segments, so too can enforcement be adjusted to meet market needs.

However, such comments as the ones above underscore a more fundamental need. With such potential diversity of positions existing within a company, software vendors should take the time to write down their corporate compliance philosophy. This is a business exercise that should involve senior management, as both the customer experience and revenue are both affected. By writing down the corporate philosophy, everyone can be clear on what the company believes about compliance, even if the philosophy acknowledges diversity of markets.

Such an exercise will be quite beneficial in terms of internal and external messaging about compliance, and, as a way to guide investments in the selection and deployment of enforcement technology so that the corporate perspective is reflected.

Want to see a sample of a compliance philosophy? If so, let us know and we can send you a sample.

Want a Better Customer Experience, Think Software Licensing: Try the “Out-of-Box” Experience

By: Cris Wendt

Want to make it easier for customers to adopt your software products, license models and technology? If so, try the 10 step "out-of-box" experience.

Software vendors are often interested in improving software licensing as a way to improve customer satisfaction, yet they don't always know where to start. I suggest that senior executives "walk a mile" in their customer's shoes and engage in a complete commerce lifecycle experience. Such an activity requires some planning, but it's pretty enlightening when an executive engages in what appear to be the mundane processes of interacting with a company. While this is designed for companies that deliver on-premises software via a CD-ROM or electronic software download, the principles and topics are equally applicable for a SaaS solution. In addition, the process shouldn't vary much for B2B, or B2C software, although some considerations may be different.

As part of the out-of-box experience I suggest following the 10 steps listed below while asking some key questions:

1. The most critical step is to order a solution from a price book with the aid of a salesperson or channel partner. There are a few questions to ask about this process to ensure it's what you want for your customers. For starters is a "solution" well-defined? Are services required? What is the maintenance offering? Is it obvious what the products do, are they structured in a price book so that they can be easily ordered to deliver on a solution? If you're like many software vendors, there are often multiple overlapping ways to order a solution and it's not always obvious what exactly to order. Also, are you asked to provide a current software configuration or information about the equipment where the software is going to be installed? If so, do you have this information readily available? Think about how you feel during this process, and perhaps consider what this means if you sell through a channel partner who has to represent and sell your product, along with those of other vendors.
   
   
2. Engage in the installation and license activation process. If you have a software download process, did the right person get the email or notification and did this happen within hours of receiving your order? If you received a physical package, were the instructions clear on how to perform an installation? Was there information on how to get assistance if it was needed? If you were asked to register, was the process simple and were the questions reasonable, or, did the process seem endless? If you were required to get a license key or activation, was it obvious that this was required? Did the product work without an activation or license key for a "grace period" so that you could start the tool and begin to use it? If you were connected to the internet, was this a simple and "hands-free" process? If a "registration number" was required for activation was it easy to find such a number? Did the software installation proceed smoothly, and were all of the install options presented with a preferred selection?
   
   
3. How easy is the software update process? Did you get a notification from the renewals group or the product that an update was available? If so, was it easy to download and install? Were you able to perform the update without additional registration numbers or activation codes?
   
   
4. Is the renewal process easy for customers? Are customers informed when a support renewal or license renewal is required? Which person or role gets the notification and is it the right person? Is it obvious what the customer should do to perform the renewal?
   
   
5. Do you provide license agreement terms along with a self-serve portal for customers to perform simple administrative tasks such as a "move" or "reactivation" on the same machine without a support call?
   
   
6. Does the self-serve portal allow customer to find information about what their organization has ordered and activated? Customers often need such information to validate their compliance reporting needs.
   
   
7. If you have an unexpected or short term need for additional software licenses, are such license terms and pricing available?
   
   
8. If you have a demo or time-based copy of software do you get notification/error messages in the product well in advance of license expiry? If so, was it clear what to do to remedy the situation?
   
   
9. Are the processes mentioned above consistent for all the different products your company offers?
   
   
10. And finally, honestly ask yourself the impact the above experiences had on your overall satisfaction (which ultimately impacts your revenue and ability to retain customers). Was your experience what you desired or expected? Do your competitors have better processes and customer experiences?

The process above is often revealing, as it provides a peek into a combination of business practices, pricing policy, and infrastructure systems upon which your business is built. However, without going through such a process, you may miss out on some important indicators on what it's like to be a customer.

Leveraging Software Licensing to Grow Device Revenue

By: John Lipsey

Intelligent device manufacturers are facing a world of change.  As globalization and commoditization continue to eat away at margins, manufacturers are looking for ways to create more value while streamlining operations.  SKU reduction is one area that's receiving a lot of buzz.  Intelligent device manufacturers who want to deliver their products more efficiently are producing fewer SKUs – less variations of the device, and are using software licensing to turn on and off capabilities and/or capacity to fit the needs of customers or a unique market segment.  SKU reduction empowers producers to lower manufacturing costs, simplify the supply chain and deliver more value for which they can charge. 

Key to executing on this value proposition is having a software licensing infrastructure in place. 

  

In this "Leveraging Software Licensing to Grow Device Revenue" video, Flexera Software's vice president of technology, David Znidarsic, discusses what intelligent device manufacturers need to know to enable a SKU reduction and device monetization strategy.