One of the challenges associated with talking about software licensing and entitlement management is that, by it's nature, it's on the more technical and operational side of things. Many people struggle to tie this directly to business drivers. Here's a list of the top 7 business drivers (in no particular order) behind software licensing and entitlement management that we see in software vendors and intelligent device manufacturers that are monetizing their software:
1. Reduce Royalty Expense--companies want to pay 3rd party technology providers the lowest royalty possible and critical to this is the ability to only pay for customers that are activating and using the royalty-based products. Software activation and control are critical enablers of achieving this business outcome.
2. Increase Trial Conversion Rates--doing so obviously drives incremental revenues while also delivering a better, more consistent customer experience. To achieve this, it's critical that the business can accurately collect detailed end user data during the process to support the business processes that will convert trials into revenue.
3. Reduce or Eliminate Intentional & Unintentional Sofware Overuse--probably the most high profile use of software licensing, electronic licensing eliminates software overuse thus generating more revenue. This is especially critical as companies seek to move your products to the cloud or into virtual environments. Software activation, enforcement, monitoring and capture raises awareness of customer usage of your software.
4. Reduce Support Costs & Improve Customer Satisfaction--this speaks to the delicate balance between software license enforcement without increasing customer frustration. Essential to accomplishing this is having tighter software licensing rules with intuitive interfaces at every rule for the customer.
5. Improve Product Lifecycle Performance--providing better insight into adoption can drive high-value and constrained engineering resources more efficiently. Understanding how customers are actually using and adopting your product and features provides product management and engineering teams tremendous insights into improving the product.
6. Increase Maintenance & Subscription Renewal Revenue--critical to any software business as these are the most profitable revenue elements. Centralized data collection in a purpose-built entitlement management system drives accurate insight and proactive outreach to customers.
7. Incremental Revenue from Innovative Software Licensing Models--leverage technology to gain more revenue and reach more customers. Spending more time on programmatically reaching customers versus fixing internally developed systems never designed for scale or rapid adaptation.
There are obviously other business benefits, but these are the top 7 that we continue to see come up as drivers behind software licensing and entitlement management initiatives across many of the world's leading companies.