Support for usage-based "trust but verify" software licensing models help application producers generate new revenue streams and capture lost revenue
Schaumburg, IL - Oct 23, 2012 - Flexera Software, the leading provider of Application Usage Management solutions for application producers and enterprises, announced today a significantly enhanced compliance management solution for application producers. The enhanced solution helps application producers maximize software revenues and eliminate revenue leakage through new support of increasingly popular usage-based, "trust but verify" software licensing models.
Flexera Software's market leading compliance management solution now provides application producers the flexibility to implement any software licensing model across the entire spectrum - from strict enforcement to usage-based, trust but verify. More than 20,000 applications already implement strict-enforcement licensing models using Flexera Software's compliance management solution.
"Software licensing continues to evolve. Driven by the demands of their customers and competition, application producers increasingly are implementing new models, many of which are usage-based," said Amy Konary, Research Vice President - Software Licensing and Provisioning at IDC. "Having the flexibility to support the full spectrum of software licensing models is a competitive advantage."
Automating Software Compliance and Enforcement
Application producers can monetize their software through a variety of licensing models outlined in the license agreement (i.e. Named user, concurrent use, node-locked and transaction-based), which are designed to capture the value of the software and dictate its permissible use. Noncompliance occurs when actual use exceeds licensing terms, in which case the license agreement may provide for enforcement options available to the application producer.
Increasingly, application producers are shifting from strict enforcement models (i.e. denial of service) 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. And 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.
Flexera Software's compliance management solution now empowers application producers to automate compliance management for usage-based, trust but verify licensing models. The solution lets producers capture actual customer software usage data, access that data through a portal, reconcile the usage data against the license agreement terms to determine a compliance position, and if appropriate, send the usage data to an external billing system to invoice the customer for licensing fees owed. Enterprises also have access to a portal that presents customer usage data, usage trends and compliance status.
According to the 2011 Key Trends in Software Pricing & Licensing Report, 47% of application producers do not monitor how customers are using their software. Moreover, the report reveals that the problem of 'inadvertent' noncompliance is widespread. More than 85% of enterprises in that survey said that at least some of their software spend is associated with application use that exceeds the license agreement.
"Our solution automatically provides the hard data to prove to both the producer and customer whether usage has exceeded the license agreement terms, by how much, and if additional payment is warranted, the means to accurately bill customers for the difference," said Mathieu Baissac, vice president of product management at Flexera Software. "With this 'trust but verify' capability, application producers have flexibility to implement the most appropriate licensing and enforcement mechanisms for their business - knowing they will have the data needed to verify use and get paid for their intellectual property."
Monetizing the Full Array of Usage-based Pricing Licensing Models
Fully and accurately monetizing traditional software licensing models has been challenge enough for application producers. But usage-based models have grown more prevalent and popular in SaaS, virtualized and cloud-based deployments and are pushing many application producers beyond their capabilities. For instance, by offering usage-based pricing options (i.e. charges based on number of gigabytes of data stored, peak usage, pay per use or burst of use, to name a few), application producers can simultaneously create new software revenue streams, cater to new and emerging markets, and address changing demands for how customers want to consume software. However, most software companies lack the flexible licensing, usage tracking and billing capabilities to accommodate the growing licensing and software monetization options available to them.
Flexera Software's compliance management solution now enables producers to overcome this limitation by supporting the full array of software licensing models and metrics across the licensing spectrum. Application producers can quickly and easily create different licensing models for their software, or package specific features and functions to sell under different licensing models. On the back end, the compliance management solution compiles a statement showing actual usage, entitlements compared to the product use rights in the license agreement, and a compliance statement accessible to the producer and customer via a portal, making it easy for application producers to easily track individual customers' software usage, as well as that of the entire customer base. Moreover, the compliance management solution manages the back-end operations associated with collecting and reporting on usage data, as well as sending that data to the appropriate billing systems for collection.
"New licensing models are constantly emerging, which if leveraged can open up significant new markets for producers," said Baissac. "However manually building out the infrastructure to accommodate these licensing models is complex, costly and constantly changing. Keeping up diverts precious resources from a company's core software development competencies. With our compliance management solution, application vendors can now quickly and easily implement any software licensing model that makes sense for their business, without having to worry about how to implement the licensing model or bill for software use."
Flexera Software's compliance management solution is built upon FlexNet Licensing and FlexNet Operations On-Demand, which are part of the FlexNet Producer Suite. FlexNet Producer Suite is comprised of:
- FlexNet Licensing: Empowers application producers to combat software piracy and increase revenues by easily enabling new pricing, packaging and software licensing models. It supports the full software licensing spectrum, from strict enforcement to usage-based trust but verify.
- FlexNet Operations: The most comprehensive entitlement management solution empowers software vendors and intelligent device manufacturers to support new revenue models easily and efficiently while streamlining and automating complex back-office processes.
- FlexNet Connect: Automates business processes, lowers operational cost and increases customer satisfaction through electronic delivery of software updates, patches, data and messages directly to end-users' systems without IT involvement.
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Learn more about Flexera Software FlexNet Producer Suite
- FlexNet Licensing
- FlexNet Operations
- FlexNet Connect
- Read our blog on Entitlement & Compliance Management
- FlexNet Producer Suite Success Stories
- Related Flexera Software Webinars
- Entitlement & Compliance Management White Papers
Flexera is reimagining the way software is bought, sold, managed and secured. We view the software industry as a supply chain, and make the business of buying and selling software and technology asset data more profitable, secure, and effective. Our Monetization and Security solutions help software sellers transform their business models, grow recurring revenues and minimize open source risk. Our Vulnerability and Software Asset Management (SAM) solutions strip waste and unpredictability out of procuring software, helping companies buy only the software and cloud services they need, manage what they have, and reduce compliance and security risk. Powering these solutions and the entire software supply chain, Flexera has built the world’s largest and most comprehensive repository of market intelligence on technology assets. In business for 30+ years, our 1200+ employees are passionate about helping our 80,000+ customers generate millions in ROI every year. Visit us at www.flexera.com.
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