The Inishtech Blog

The Evolution of Software Application Licensing – The wheel has nearly turned full circle!

Just over a decade ago Software Vendors seemed more interested in preventing misuse and piracy of their applications than making it easy for customers to buy and use their product. The customer journey was anything but streamlined. Purchasing was not easy. Fulfilment and installation were rarely fully automated, particularly as regards giving the customer control over the process, and the overall experience was frustrating to say the least.

This was pre-SaaS when even managed automated trials and different packaged editions of software and Feature Sets were not the norm in the On-Premises world and subscription plans were not an option.

SaaS changed customer perceptions and hastened the move towards a more customer centric model with greater flexibility in allowing customers to choose exactly what features they wanted for different users, more customer interaction and control in the acquiring and upgrading their software and easy purchasing with subscription options. With streamlined business processes supported by flexible licensing and purchase plans, On Premise software could compete against the simplicity of the SaaS model, provide the Vendors made the necessary strategic investment.

Unfortunately, not all Vendors did and when Covid hit in early 2020, the full effects of poor licencing systems and processes became apparent very quickly. Traditional device-based licensing simply could not cope with the need for a more User Centric approach allowing the User the flexibility to use his application of the most appropriate device at the time and there are many horror stories of companies taking weeks and even months to successfully transfer applications to staff working at home and in new locations simply because the Vendor could not cope with the demand that this surge in demand created for their customer service logistics

Addressing these issues of streamlining the customer journey from purchase to provisioning, providing total flexibility in package and payment plans and giving the customer control over how they deploy and use applications is still a key issue.

The landscape for software in the foreseeable future will be a combination of SaaS, On Premise, Hybrid and IOT and Vendors may well have offerings across all of these models. The reality is that Software Licensing and Entitlements Management needs to reflect this changing landscape, and this will involve new challenges such as:

  • The transition from a Device Focus to User Centric.

Users want to be able to use their application whenever and wherever required without being bound to specific devices where a license may be installed. The customer needs to have control/visibility of application usage

  • Enforcement coupled with usage tracking

Licensing needs to provision and enforce what modules/features are enabled for a customer and then separately track usage on a user basis in SaaS, On Premise and Hybrid models

  • Customer focus

Customers must be able to purchase and use software with little or no vendor intervention. The challenge here is re-engineering front end commercial purchasing flows. This presents a major challenge for traditional software vendors with legacy back and front office systems

  • Consolidated Billing

Billing systems will need to take information from multiple application bill plans and commercial models (SaaS, OnPrem, Hybrid, Usage/Metred, etc.) and present to the customer in a unified manner

  • IOT also faces similar challenges

IOT will continue to have a focus on device level licensing but will need to same flexibility and dynamism in facilitating customer management and smart billing which may also need to be part of a unified billing structure

One of the main reasons cited for a reluctance by Vendors to embrace change in Licensing Systems and processes is the level of integration with business systems such as ERP and CRM and the potential risks associated with introducing new systems. With these new challenges it is unlikely that Vendors can continue to ignore the need for change any longer.

There are challenges to be overcome but the rewards for both Vendors and Customers far outweigh the risks.