SOFTWARE LICENSING

Optimize Revenue and Customer Experience with Software License Compliance Management

By Rachel Ramsey, TMCnet Web Editor

Maximizing software revenue involves ensuring customers are compliant with license agreements and having the mechanisms to capture revenue throughout the software lifecycle. Increasingly, application producers are shifting from strict enforcement models to trust-but-verify and subscription offerings, and accordingly, are implementing usage-based models as a means to monetize their products. Visibility into the customers' actual software usage and the ability to compare that usage to the license agreement terms and conditions are critical to supporting these new license models.

Software compliance is being able to demonstrate that you have the correct number of licenses paid and accounted for on your systems compared and matched to what you have installed. New compliance management strategies empower application producers to automate compliance management for usage-based, trust-but-verify licensing models. 

In 2011, IDC (News - Alert) pegged the global packaged software market at $325 billion. At the same time, the 2011 BSA Global Software Piracy study found that 57 percent of the world's personal computer users pirate software. In fact, the commercial value of pirated software climbed from $58.8 billion in 2010 to $63.4 billion in 2011. In a recent Flexera Software blog post, the company explains that application producers have a lot at stake when it comes to software license compliance management.

According to the post, the software industry has historically struggled with trust as it relates to the exchange of fair value. Many enterprises unintentionally overuse despite their desires and best intentions to avoid it. Regardless of the reason, piracy or unintentional overuse of software costs application producers billions of dollars annually. It's also a problem for corporate users who need to comply with contract terms as a matter of business ethics and compliance with corporate governance guidelines.

Application producers provide customers with an application based on an understanding of how the customer will be entitled to use that product across the organization. Application producers typically enforce how the product will be used with a licensing model that protects and monetizes their IP. Over time, and depending on the markets and segments the producer serves, the producer may adapt a different licensing model based on changing customer needs or choose to adopt multiple licensing models.

The reality is that those companies that get compliance management right are able to optimize revenue while delivering an even better experience to customers, and those that don't risk losing revenue and alienating their customers.

Because most application producers do not have visibility into actual customer usage, determining a "single version of the truth" pertaining to usage is virtually impossible, which makes fair enforcement and/or re-negotiation of licensing terms difficult at best, and marked by suspicion, mistrust and animosity with customers, at worse. 

As the market leader in software license compliance solutions, Flexera Software empowers application producers to implement a broad spectrum of licensing policies – from up-front enforcement to a more liberal trust and verify approach. Producers are able to enable flexible monetization and licensing models, offer mature monetization models for SaaS (News - Alert) applications, prevent anti-piracy and licensing abuse and adapt to changing market conditions.

The company’s software license compliance management solutions support the latest licensing models and back-office automation to manage a growing software business, enabling application producers to generate more ongoing revenue from customers.

Mathieu Baissac, vice president of Product Management at Flexera Software, will be presenting a session at the upcoming Compliance Manager Summit in San Jose, CA (News - Alert), in a session entitled, "What's Hot: Trends and Tech Tools for Compliance and Enforcement." Baissac will cover the latest trends in software license enforcement and compliance management strategies that application producers are using to elevate their software licensing, entitlement and compliance management practices.