Usage Management refers to monitoring, managing and sharing application usage data between consumers and producers of software to enable continuous compliance and optimized software usage.
Each year, IDC and Flexera Software conduct a survey of software producers and enterprises to understand trends in software licensing and pricing. Two questions that are asked of software producers are: "Do you use usage-based licensing today?" and "In the next two years, do you plan to adopt usage-based licensing?" In 2008, 35% of about a 100 software producers said they would adopt usage-based licensing. However, in 2011, only 21% of software producers had actually adopted usage-based licensing. What might possibly explain the 14% of software producers who dropped off of the usage management bandwagon despite their intentions?
We think the answer lies in five (5) challenges that software producers face when attempting to launch usage-based licensing or software compliance models.
No tools to track usage: No commercial tools are currently available to track usage for both software producers and enterprises. While enterprise asset management systems have the ability to track and report on installations of software, they cannot tell if software was actually used. To understand the distinction, take note of the software titles on your company-provided device that you have never used. Without proper tools to track usage, software producers have to rely on creating their own usage tracking software.
Lots of manual processes to share usage data: In the few cases where software producers create rudimentary tools to track and report usage, they still impose a number of manual processes based on spreadsheets that need to be extracted by enterprises and shared with producers. Clearly, this approach does not scale beyond pilot programs of usage management.
Need to support the licensing continuum: With very few exceptions, software producers need to support a continuum of software licensing approaches, from strong enforcement to pure usage-based approaches, depending on product line, geography or customer segments. For example, for Box.com, a file sharing service, the producer has to enforce features and editions while also tracking usage metrics such as number of users and amount of file storage used. In addition, there might be subscription plans versus pay-per-use software licensing models being used depending on context.
Complex usage models: When usage data is used for compliance or licensing, the formula used for computing usage can vary greatly. Examples of usage models include peak (high watermark) usage, average usage over a time period, most recent usage and so on. Clearly, this can get quite complex very quickly.
Data privacy and tamper-proofing: Enterprises are understandably concerned about sensitive data being shared as a result of usage reports. In addition, some enterprises are also concerned about usage data being tampered with by producers to pad their invoice.
Overcoming these challenges requires an automated approach to usage tracking and reporting along with self-service for enterprises to understand their usage at all times.
Read other blogs on this topic:
- Usage-Based Licensing without Usage Data – Is it Possible?
- The Next Evolution of Software Licensing: Monetization of Usage Data
- True Pay-As-You-Go Software Licensing Model – Myth or Reality?
What challenges have you faced with usage management? How did you overcome them?