Coping With Software Licensing Challenges in the Cloud

A majority of independent software vendors were dealing with an escalating assortment of organizational issues monitoring and monetizing their software capabilities, according to a survey of ISV executives, which Vanson Bourne conducted last year on behalf of Gemalto.

As many of those ISVs move to the cloud and Software as a Service delivery models, they face even greater obstacles achieving their business objectives.

Corporations and consumers alike no longer are interested in acquiring on-premises or even downloaded software. They prefer on-demand, subscription or usage-based consumption alternatives that require ISVs to pursue new software design and monetization approaches.

More Insights, Please

Approximately nine in 10 ISV respondents admitted that their organizations were experiencing challenges with their software licensing (91 percent) and their software packaging/bundling (88 percent) as a consequence, the survey found.

More than 80 percent of the ISVs that responded to the survey said they constantly needed to adapt to evolving market needs and were obliged to develop software packaging that could meet a variety of customer needs.

Around four fifths also recognized their software needed to be future-proof to be successful (81 percent). Yet approximately two thirds (68 percent) of the respondents said they didn’t have visibility into how their products were being used, which made it hard to determine how to enhance the software on a continuous basis.

Show Me the IoT Money

Those challenges also have had a detrimental impact on the ISVs’ ability to monetize their software solutions. More than half of the survey respondents (54 percent) reported they had lost revenue due to licensing issues.

Over the past year, those problems have become further complicated with the shift to the cloud and the advent of the Internet of Things, with software becoming embedded into everything.

Seventy percent of the survey respondents recognized that the IoT could provide their organization with new monetization opportunities, but the same percentage admitted there was a lack of clarity about how they should monetize the IoT.

A growing array of enterprises now are experiencing the same licensing issues as they attempt to become software vendors. They not only have to recruit a new breed of software developers, but also need to implement a new software licensing and management apparatus to monitor and ultimately monetize their new software capabilities.

Juggling Act

Companies like Gemalto have been providing software licensing tools to respond to traditional monitoring and monetization issues for a long time. Now, they’re making a concerted effort to provide a new level of cloud-based solutions that align with the new set of software licensing challenges created by SaaS and other cloud-oriented software strategies.

They are offering integrated entitlement management, connected licensing and business intelligence to keep pace with the more dynamic world of the cloud and IoT. This approach can address the product, policy, process and business challenges associated with software licensing in the new on-demand world.

The key to successfully addressing the software licensing challenges in the cloud and IoT is to focus on software protection and governance while maximizing customer self-service/experience and monetization.

Jeffrey M. Kaplan

Jeff Kaplan is the managing director of THINKstrategies, founder of the Cloud Computing Showplace, and host of the Cloud Innovators Summit executive forum series. He can be reached at [email protected].

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