ISVs still find monetizing their software challenging; compliance a primary concern

Gemalto’s State of Software Monetization report revealed that enterprise software customer demands are evolving and software vendors and intelligent device manufacturers need to adopt flexible and adaptable licensing and packaging techniques in order to meet these needs and generate more revenue opportunities. The survey of 600 enterprise software users and 180 independent software vendors found that vast majority of respondents (85 percent) think software vendors need to constantly adapt to evolving market needs. [caption id=“attachment_2505126” align=“alignleft” width=“380”]  Source: Gemalto[/caption] More specifically, 83 percent of enterprise respondents said that flexible software packaging and accessibility across multiple devices are extremely important to them. In addition, four out of five respondents believe that software needs to be future-proof to be successful. The report further stated that ISVs are still finding monetizing their software challenging, especially including back office tasks and licensing enforcement. Only one in ten ISVs reported no licensing operations challenges. Top back office issues included: Cost of renewing and managing licenses (87 percent); Time spent renewing and managing licenses (83 percent); Time and cost spent on non-product-related development (82 percent); and Limited visibility into how products are being used (68 percent).  Enterprise software consumers expressed their frustration with traditional, rigid software licensing, packaging and delivery options. They are increasingly looking for online software delivery, metered usage and device-agnostic licensing, claimed the study. Only 10 percent of enterprise respondents claimed that their organisation is not experiencing challenges with their software licenses. Among the remaining respondents, top licensing challenges included inflexible license agreements, long customer on-boarding and lost licensing keys. Top software license preferences included: Enterprise licenses (59 percent); Site licenses (45 percent); and Concurrent-user licenses (40 percent). The survey highlighted that compliance is still a primary concern among ISVs. Four-fifths of ISV respondents worry about unlicensed software use, up from about three-quarters in 2012. Among unlicensed software usage, ISV respondents said that their top concerns were: Competitive theft of intellectual property (59 percent); Intentional licensing agreement violations (56 percent); and Software piracy (48 percent). At the same time, almost half of enterprise respondents admit to being non-compliant with a software agreement. When asked about how ISVs could improve their services: 80 percent think software vendors could provide more clarity around processes/audits; and 72 percent think software vendors could improve usage tracking/audits. Of the enterprise users who had implemented a commercial software monetization solution, two-thirds were up and running in less than six months. “The way that software is consumed is changing – whether users only want certain features, to use it on the device of their choice, or only want to pay for what they use,” said Shlomo Weiss, Senior Vice President, Software Monetization at Gemalto. “Independent software vendors (ISVs) have to keep up with the changing demands of their customers. We see that piracy, reverse engineering, and deliberate and unintentional misuse are all still monetization concerns for ISVs. However, now more than ever, delivering software in ways that customers want to consume it is critical for creating a user experience that sells.”