Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Software licensing

1 - Opportunity: Software Licensing Revenue RecoveryOpportunity: Software Licensing Revenue Recovery

For software vendors and, by extension, their channel partners, the lack of visibility into how software is being used creates revenue leakage.

2 - Best Sources of Upside for ISVsBest Sources of Upside for ISVs

Mobile apps (51%), virtualization (45 %), subscription-based licensing (43%), embracing public cloud computing (41%) and the Internet of things (37%) are cited as having the most growth potential.

3 - Greatest Sources of RiskGreatest Sources of Risk

Nearly half (48%) cited security. Only 20% of respondents see risk associated with bring-your-own-device practices, while mobile apps and public cloud were cited by 18% and 17%, respectively.

4 - Role of the Internet of ThingsRole of the Internet of Things

32% cited IoT is having a high impact on customer satisfaction, while 30% said it is having a high impact on security. In the next 12 to 24 months, 16% said that the IoT will cause a significant impact on business models.

5 - Impact of the CloudImpact of the Cloud

38% said cloud security is still a concern. In 12 to 24 months, 15% of respondents said the cloud will impact business models and lifecycle processes.

6 - Impact of VirtualizationImpact of Virtualization

29% said security concerns are having a high impact. In 12 to 24 months, 13% said virtualization will affect lifecycle processes.

7 - Impact of Mobile ComputingImpact of Mobile Computing

Customer satisfaction (34%), new product innovation (33%) and security concerns (33%) are all high-impact issues. In 12 to 24 months, 17% of respondents said they will feel the effect of mobile in both the security arena and supporting new business models.

8 - Licensing OptionsLicensing Options

Only 51%, offer “try-and-buy” options, and 49% offer variable-licensing models to accommodate customer preference. Only 47% package different product variants to accommodate unique market needs. Still fewer, 39%, offer upgrade paths to more expensive software versions. Only 23% offer “freemium” licenses. And just 20% offer mobile versions of their software.

9 - Dependence on Perpetual LicensingDependence on Perpetual Licensing

Just over a quarter (26%) said that all of their revenue comes from perpetual licenses. Within two years, this will shrink to 14%. But 61% said half or more of their revenue still comes from perpetual licenses today. Within two years, this will decrease to 54%.

10 - Dependence on Usage-Based LicensingDependence on Usage-Based Licensing

Today, 17% of producers said that half or more of their revenue comes from usage-based licensing models. Within two years, that will increase to 21%.

11 - Usage of Licensing-Management SystemsUsage of Licensing-Management Systems

61% do not rely on a commercial licensing system. Rather, they develop and maintain their own licensing systems in-house to address at least some of their needs. Only 35% use a purpose-built commercial licensing technology.

12 - Software Revenue LeakageSoftware Revenue Leakage

Software license non-compliance is rampant. A full 63% said that customers are out of compliance in that they’re using software beyond what they’re entitled to use.

13 - Levels of Software-Licensing AutomationLevels of Software-Licensing Automation

The majority of producers still have not automated their back offices by implementing entitlement-management systems. In fact, 58% develop and maintain their own entitlement-management systems to address at least some of their needs. In contrast, 22% do nothing, while 19% use a proprietary, custom extension of their ERP/CRM systems. Less than a quarter (23%) use a purpose-built third-party commercial entitlement management system.