Licensing Industry Leader Proposes Enterprise Software Be Bought and Sold Based on Value Rather than Hardware Environments or Processing Capabilities
Santa Clara, CA - Apr 27, 2005 - Macrovision Corporation (Nasdaq: MVSN), the leader in Software Value Management, today weighed in on the well-chronicled debate among software vendors on the impact of multi-core processors on software licensing.
"The two countering positions on whether or not to charge per core are missing a vital piece of the equation," said David Znidarsic, VP of Technology for Macrovision. "Both approaches have merit but neither takes into account that CPU-based software licensing is an increasingly problematic model because it is based on the hardware environment in which software runs rather than on how much value a user derives from it. The introduction of dual and multi-core processing is triggering a long overdue debate and forcing software vendors to reassess the way they’ve traditionally sold enterprise software. Macrovision believes that the industry needs a new licensing model—a model based on value rather than CPUs and cores."
Multi-core architectures, offered by companies such as Intel, AMD and others, have two or more execution cores within a single central processing unit (CPU), which, in theory, creates at least twice the processing power without an additional chip. The advent and rapid adoption of these chips by computer manufacturers has created turmoil among software vendors that have traditionally sold software based on the number of CPUs on which it will run. Now that processors can have multiple cores within a single processor, should a software vendor license for each core or for each chip? This question has divided the software industry into two camps, each stating strategic reasons for their position.
But whether a software vendor charges per core or per processor, the argument remains focused on the environment rather than the value. As multi-core architectures continue to evolve and as other technologies emerge that impact how software runs on computing infrastructures, environment-based pricing may become far too complex to manage and ultimately could cause customers to become confused and dissatisfied.
"Many software vendors are discovering that CPU-based pricing does not effectively capture the true value of their software," said Amy Konary, Program Director for Software Pricing, Licensing, and Delivery at IDC. "A flexible model based on value can be the best approach, but once the appropriate value metric has been determined, tracking and reporting can be challenging for the vendor and customer. Macrovision offers an underlying platform to help support these new models."
Macrovision’s FlexNet® line of Software Value Management (SVM) solutions provide software vendors and enterprises with a foundation for driving value in the delivery and use of software. As an example, SVM solutions give companies the ability to price their products based on the number of queries run in a database application or the capacity used by a storage application. At the same time, Macrovision’s SVM solutions give enterprises granular details on what applications they are using and how they are using them in order to help reduce costs and increase productivity.
For publishers, SVM can translate into greater revenue opportunities and great flexibility in offering a range of delivery models for customers. And for enterprises, it can lead to a more rational and understandable pricing structure, which is directly tied to how they access and use software versus how many cores they are running on a database server.
Macrovision believes it is at the center of one of the most important changes in software as the industry evolves from one-size-fits-all to more flexible pricing models as enterprises become more efficient about how they buy and use software. Macrovision’s SVM solutions include software installation, updating, packaging, licensing, entitlement management, end user management, and usage optimization.
Macrovision Corporation is the market leader in electronic licensing, installation, and digital rights management (DRM) technologies. Over 50,000 software publishers and virtually all of the Fortune 1000 companies use Macrovision’s technologies to maximize the value of their software. Software Value Management solutions bridge the gap between pricing and packaging software on the developer side, and purchasing and managing that software on the enterprise side. Macrovision’s Software Technologies Group markets the FlexNet™ universal licensing platform and the InstallShield suite of software installation, repackaging and update solutions, which are deployed on more than 500 million desktops worldwide. Macrovision holds more than 700 software licensing, DRM and content protection patents worldwide. Macrovision is headquartered in Santa Clara, California and has offices worldwide. More information about Macrovision and Software Value Management solutions can be found at www.macrovision.com.
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This press release may contain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995. A number of factors could cause Macrovision’s actual results to differ from anticipated results expressed in such forward-looking statements. Such factors are addressed in Macrovision’s Annual Report on Form 10-K for the year ended December 31, 2004, which is on file with the Securities and Exchange Commission (available at www.sec.gov). Macrovision assumes no obligation to update any forward-looking statements.
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