I often get asked – Why put licensing in software products at all? What’s the business value?
My answer typically includes:
- Enables new pricing and software monetization models
- Allows publishers to implement a variety of different models such as rentals, floating/ concurrent, pay-for-use, pay-for-burst, automated true-up
- Enables the slicing and dicing of the application without changing code--creating editions, turning on features, enabling capacity, etc.
- Enables flexibility, allowing publishers to charge differently by geographies and by markets
- With software licensing, enterprises can buy the “Hugo” version if they can’t afford the “Cadillac” version and then upgrade and subscribe to the “Cadillac” version for a 6 month project
- Helps keep honest customers honest
- As a user, if there is licensing in the product, then it’s the publisher’s responsibility to ensure that I’m compliant
- As a publisher, if there is licensing in the product, then I’m pretty sure that my customers aren’t accidently getting out of compliance
Given that more than 20% of enterprises state that they only used manual methods or no methods to track compliance in an IDC 2011 survey, we know that enterprises can use some help.
- Helps secure trials
- Enterprises can try out new software
- Publishers can provide trials securely
- Captures contact information
- During the activation process publishers can capture end customer contact information – typically these folks are closer to the real users than the purchasing agents captured during order management
- Helps with upgrade notifications, product-specific notices, etc.
- Allows publishers to standardize hardware
- Device manufacturers can standardize on the same hardware but use licensing to turn on/off different capabilities and capacities
- Helps reduce manufacturing costs (passing on the savings onto customers)
What’s your perspective? Why do you put licensing in your products?