Over the next several weeks I will be posting a series of blogs on software license compliance management, including:
- Part 1 – Why Software License Compliance Management Matters
- Part 2 – Pros and Cons of Traditional Compliance Management Approaches
- Part 3 – Impact of Technology on Compliance Management
- Part 4 – The Increasing Complexity of Software Licensing
- Part 5 – The Growing Trend towards a Trust but Verify Compliance Management Approach
- Part 6 – Revenue, Trust, and the Customer Experience
In 2011 IDC pegged the global packaged software market at $325 billion. At the same time, the 2011 BSA Global Software Piracy Study found well over half of the world’s personal computer users—57 percent—admitted they pirate software. In fact, the commercial value of pirated software climbed from $58.8 billion in 2010 to $63.4 billion in 2011. Clearly application producers have a lot at stake when it comes to software license compliance management
Business Relationships Depend on Trust between Buyers and Sellers
The software industry has historically struggled with trust as it relates to the exchange of fair value. Many enterprise companies find themselves with unintentional overuse despite their desires and best intentions to avoid it. Regardless of the reason, piracy or unintentional overuse of software costs application producers billions of dollars annually. It’s also a problem for corporate users who need to comply with contract terms as a matter of business ethics and compliance with corporate governance guidelines.
Selling and Monetizing Software with Licensing
Application producers provide the customer with an application based on an understanding of how the customer will be entitled to use that product across the organization. Application producers typically enforce how the product will be used with a licensing model that protects and monetizes their IP. Over time and depending on the markets and segments the producer serves, the producer may adapt a different licensing model based on changing customer needs or they may choose to adopt multiple licensing models.
Getting Software License Compliance Management Right Is Difficult
The reality is that those companies that get compliance management right are able to optimize revenues while delivering an even better experience to their customers. And those that don’t, risk losing revenue and alienating their customers in the process.
Next Time: Part 2 – Pros and Cons of Traditional Compliance Management Approaches