Key Trends in Software Pricing and Licensing Survey – Virtualization, License Compliance and the Application Producer/Enterprise Relationship

Survey Background

The 2013-14 Key trends in Software Pricing and Licensing survey was conducted by Flexera Software with input from IDC’s Software Pricing and Licensing Research division under the direction of Amy Konary, research vice president - software licensing and provisioning at IDC. This annual research project looks at software licensing, pricing and enforcement trends and best practices. The survey reaches out to executives at application producers (Software vendors and intelligent device manufacturers) and enterprises who use and manage software and devices. Now in its ninth year, the survey is made available to the industry at large each year.

Methodology and Sampling

In total, 1,828 respondents participated in the survey, including 430 enterprise participants and 1398 application producer participants.

Enterprise Demographics

41% of the enterprise respondents were from larger enterprises of $1 billion or more in revenues and 14% were from companies with $3 billion in revenues or more. Among other places, 56% of respondents were from North America, 28% were from Europe, and 7% were from Australia.

Application Producer Demographics

The largest segment of application producer respondents (60%) come from companies with $10 million and under in revenues. 3% of the respondents were from companies with $1 billion or more in revenues. Among other places, 47% of respondents are from North America, 23% from Europe, and 13% from Australia.


The relationship between software vendors and intelligent device manufacturers (“application producers”) and their customers (“enterprises”) has been a complicated one. On the one hand, application producers develop mission-critical applications critical to every facet of an enterprise’s operations. Without software, the remarkable efficiency and cost reductions organizations have been able to achieve in recent decades simply wouldn’t be possible.

On the other hand, the software license supply chain is one of the most opaque, difficult to understand and complex to manage. As a result, the relationship between application producer and customer has often suffered.

Software licensing models, terms and conditions are notoriously complex, making compliance difficult for customers. How application producers price their software often creates tension as well. Application producers are looking to maximize their revenues and profits, while enterprises want to tie the cost of their investment in software to value.

Moreover, while enterprises crave simplicity they also demand choice, flexibility and terms uniquely tailored to their business needs. So application producers are caught between two opposing customer requirements.

This report examines the pricing and licensing strategies that application producers have put into place and are planning, and the impact that this will have on the often-fraught application producer/enterprise relationship.