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SOFTWARE VALUE MANAGEMENT. Dan Stickel EVP & General Manager Software Technologies Group Macrovision. AGENDA. Software Pricing & Licensing Study Software Value Management Case Studies How Do You Rate?. MACROVISION BACKGROUND. Digital product value management (software, movies, music) - PowerPoint PPT Presentation
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SOFTWARE VALUE MANAGEMENT
Dan StickelEVP & General ManagerSoftware Technologies GroupMacrovision
The Standard in Software Licensing & Installation Slide 2
AGENDA
• Software Pricing & Licensing Study
• Software Value Management
• Case Studies
• How Do You Rate?
The Standard in Software Licensing & Installation Slide 3
MACROVISION BACKGROUND
• Digital product value management (software, movies, music)
• NASDAQ: MVSN; $170M+ estimated 2004 revenues
• 500 million desktops; 70,000 customers; $85B+ software protected
• 700+ patents worldwide in licensing & DRM
• IDC names Macrovision “clearly the leader” in licensing
• Worldwide support & professional services
The Standard in Software Licensing & Installation Slide 4
SIIA BACKGROUND
• The Software & Information Industry Association (SIIA)
• Principal trade association for software and digital content industry
• Global services in government relations, business development, corporate education and intellectual property protection
• More than 600 leading software and information companies
The Standard in Software Licensing & Installation Slide 5
METHODOLOGY & SAMPLE
100 Enterprises
– Typical titles were CTO, VP Development, and IT Director
– InformationWeek, 3rd party databases
396 Software Vendors
– Typical titles were CEO, CMO, VP Product Marketing, and VP Product Management
– SIIA, 3rd party databases
Email Survey in September 2004
The Standard in Software Licensing & Installation Slide 6
Perpetual versus Subscription: Today
Two-thirds of publishers focus on perpetuals
The Standard in Software Licensing & Installation Slide 7
Perpetual versus Subscription: Tomorrow?
Publishers planning to increase subscriptions
The Standard in Software Licensing & Installation Slide 8
Perpetual versus Subscription: Enterprise View
But enterprises prefer perpetuals…
The Standard in Software Licensing & Installation Slide 9
Publisher License Metrics: Today
Diverse mix reaches diverse buyers
The Standard in Software Licensing & Installation Slide 10
Publisher Licensing Metrics: Tomorrow?
New metrics gaining ground
The Standard in Software Licensing & Installation Slide 11
Publisher License Metrics: Enterprise View
But enterprises still prefer concurrent user…
The Standard in Software Licensing & Installation Slide 12
License Compliance: Today
Mix of techniques
The Standard in Software Licensing & Installation Slide 13
License Compliance: Tomorrow?
Migration to automated software compliance
The Standard in Software Licensing & Installation Slide 14
License Compliance: Enterprise View
Enterprises prefer centralized licensing
The Standard in Software Licensing & Installation Slide 15
Software Maintenance by Customer Type
Consumers pay less … and get less.
Average 21% maintenance
The Standard in Software Licensing & Installation Slide 16
Software Maintenance by Publisher Size
Fairly uniform across publishers
Average 21% maintenance
The Standard in Software Licensing & Installation Slide 17
Study Key Findings
• Perpetual versus subscription
– Software publishers moving strongly to subscription
– Enterprise respondents prefer perpetual to subscription 2:1
• Licensing enforcement going digital
– New licensing models based on metrics gaining popularity
– Concurrent and per user pricing models still preferred
– Buyers still comfortable with no (paper) compliance, but prefer network licensing and product activation to audit teams or hardware dongles
• Maintenance fees
– Overall average 21%
– Enterprises demand more, and pay more
The Standard in Software Licensing & Installation Slide 18
AGENDA
• Software Pricing & Licensing Study
• Software Value Management
• Case Studies
• How Do You Rate?
The Standard in Software Licensing & Installation Slide 19
SOFTWARE VALUE MANAGEMENT
It begins once engineering is ready to release the software that they have built. It ends when a customer retires the application.
Define Build Market Sell Distribute Service Renew Retire
Software Value Management is a set of activities during the software lifecycle that are focused explicitly on maximizing the value of one’s software.
The Standard in Software Licensing & Installation Slide 20
Software Publisher
Software Customer
SOFTWARE VALUE MANAGEMENT (SVM)
SVM activities are undertaken by BOTH software publishers AND their customers.
Define Build Market Sell Distribute Service
Renew
Buy MaintainPrepare
& Deploy
Retire
The Standard in Software Licensing & Installation Slide 21
• Software Pricing & Licensing Study
• Software Value Management
• Case Studies
• How Do You Rate?
AGENDA
The Standard in Software Licensing & Installation Slide 22
SOFTWARE VALUE MANAGEMENTVENDOR CASE STUDIES
ProductizePrice & License Distribute Evaluate Purchase Prepare MaintainDeploy Re-Purchase
“Market segmentation and better enforcement with licensing technology helped us create a substantial new revenue stream.”
The Standard in Software Licensing & Installation Slide 23
SOFTWARE VALUE MANAGEMENTVENDOR CASE STUDIES
“Customers had to guess how many seats they needed…”
“It really comes down to making sure that [customers] have access to our software.”
Productize Distribute Evaluate Purchase Prepare MaintainDeploy Re-PurchasePrice & License
The Standard in Software Licensing & Installation Slide 24
“Sometimes we do business with companies we don’t know well, in other parts of the world. It’s nice to be confident that after the evaluation they really do have to pay us to continue using the software.”
SOFTWARE VALUE MANAGEMENTVENDOR CASE STUDIES
ProductizePrice & License Distribute Purchase Prepare MaintainDeploy Re-PurchaseEvaluate
The Standard in Software Licensing & Installation Slide 25
MOST ENTERPRISES ARE NOT TRACKING LICENSE COMPLIANCE
“What types of software license information do you track?”
The Standard in Software Licensing & Installation Slide 26
“Before we had problems with conflicting installs, which we had to resolve through a lengthy trial & error approach.”
“Now we proactively identify those problems upfront before we deploy our applications.”
SOFTWARE VALUE MANAGEMENTENTERPRISE CASE STUDIES
ProductizePrice & License Distribute Evaluate Purchase Maintain Re-PurchasePrepare Deploy
The Standard in Software Licensing & Installation Slide 27
5.3 million customers needed to have the most up-to-date software
“Today it is easy for us to deliver software and data updates to all our users thereby increasing customer satisfaction and eliminating costly support calls.”
SOFTWARE VALUE MANAGEMENTVENDOR CASE STUDIES
ProductizePrice & License Distribute Evaluate Purchase Prepare Deploy Re-PurchaseMaintain
The Standard in Software Licensing & Installation Slide 28
Software from 32 vendors supporting 18,000 people globally
“We now understand exactly what our license requirements are for the whole corporation. With that information we can make better, more informed and more strategic decisions.”
SOFTWARE VALUE MANAGEMENTENTERPRISE CASE STUDIES
ProductizePrice & License Distribute Evaluate Purchase Prepare Deploy Maintain Re-Purchase
The Standard in Software Licensing & Installation Slide 29
SVM – THE BOTTOM LINE FOR THE SOFTWARE VENDOR
• Increased Revenues through…
– Better Pricing
– Differentiated Products
– Broader market penetration
– Deeper account penetration
• Greater customer service…and satisfaction
The Standard in Software Licensing & Installation Slide 30
SVM – THE BOTTOM LINE FOR THE ENTERPRISE
• Increased Productivity with…
– Broader software distribution rights
– Greater uptime
– Optimized license purchasing
• Reduced Support Costs through
– Easier software deployment
– Easier license support
– Reduced crashes
The Standard in Software Licensing & Installation Slide 31
AGENDA
• Software Pricing & Licensing Study
• Software Value Management
• Case Studies
• How Do You Rate?
The Standard in Software Licensing & Installation Slide 32
SVM: HOW DOES YOUR COMPANY RATE?
Vendors:
• Are you maximizing your revenue potential?
• Are you able to reach every potential user of your application?
• Are end-users instantly aware of new releases?
Enterprise:
• Are you maximizing your organization’s productivity?
• Are you buying too much capacity? Too little?
• Can you quickly deploy new software with little effort or conflict concerns?
ProductizePrice & License Distribute Evaluate Purchase Prepare MaintainDeploy Re-Purchase
? ? ? ? ? ? ? ? ?
The Standard in Software Licensing & Installation Slide 33
SVM Stage: DISTRIBUTE
ProductizePrice & License Evaluate Purchase Prepare MaintainDeploy Re-PurchaseDistribute
Software Vendor Scorecard
Score Strategic Implications
0-3 Your company is making it harder for your customers than it needs to be, simplifying the customer experience could increase their satisfaction, and reduce your operational costs.
4-7 You are almost there. Automating all license & software delivery activities could lead to increased revenues and decreased operational costs.
8-20 Your company is creating value for your customers and maximizing profitability.
DISTRIBUTE (a) In UseNo-0 1-Yes
(b) Impact on Revenues Low-2-3-4-High
(c) Score(a) x (b)
Licenses & software are available from one web-based location 0 or 1 1 – 2 – 3 – 4 – 5
License keys are automatically generated based on preset rules & customer entitlements
0 or 1 1 – 2 – 3 – 4 – 5
All activity is captured in your CRM system 0 or 1 1 – 2 – 3 – 4 – 5
Customers have web-based, self-service tools to manage their accounts and licenses 0 or 1 1 – 2 – 3 – 4 – 5
TOTALTOTAL
The Standard in Software Licensing & Installation Slide 34
SVM Stage: PURCHASE
ProductizePrice & License Distribute Evaluate Prepare MaintainDeploy Re-PurchasePurchase
Software Vendor Scorecard
Score Strategic Implications
0-3 Your company can probably increase conversion rates and win more customers with more flexible systems in place
4-7 Check with your salesforce – if you provide them with more flexibility they may be able to close more sales
8-20 Your salesforce has the flexibility to maximize their sales with each customer
PURCHASE (a) In UseNo-0 1-Yes
(b) Impact on Revenues Low-2-3-4-High
(c) Score(a) x (b)
Sales team can customize license terms for any customer and the ERP applications easily support this. 0 or 1 1 – 2 – 3 – 4 – 5
Sales team can easily “turn off functionality” of your software to meet/justify a customer’s budget constraints
0 or 1 1 – 2 – 3 – 4 – 5
Customers can easily buy more licenses via a 24x7, web-based self-service 0 or 1 1 – 2 – 3 – 4 – 5
Customers and you can see their purchase history and how that may impact new entitlements. 0 or 1 1 – 2 – 3 – 4 – 5
TOTALTOTAL
The Standard in Software Licensing & Installation Slide 35
SVM Stage: PURCHASE
ProductizePrice & License Distribute Evaluate Prepare MaintainDeploy Re-Purchase
Enterprise Scorecard
Purchase
Score Strategic Implications
0-3 You may be able to have a significant impact on your company’s bottomline by either reducing software expenditures or increasing end-user productivity
4-7 If you negotiate some of these non-financial items with your software vendors, you may be able to improve end-user productivity and satisfaction.
8-20 Your company is doing and excellent job at vendor negotiation and providing your employees with adequate access to software tools
PURCHASE (a) In UseNo-0 1-Yes
(b) Impact on Revenues Low-2-3-4-High
(c) Score(a) x (b)
Have negotiated licensing terms so that your users gain maximum access to software 0 or 1 1 – 2 – 3 – 4 – 5
Have methods in place to track actual software usage so that you can accurately estimate requirements
0 or 1 1 – 2 – 3 – 4 – 5
Have negotiated optional “pay-per-use” provisions in case maximum license limit is reached.
0 or 1 1 – 2 – 3 – 4 – 5
TOTAL
The Standard in Software Licensing & Installation Slide 36
SVM Stage: MAINTAIN
ProductizePrice & License Distribute Evaluate Purchase Prepare Deploy Re-Purchase
Enterprise Scorecard
Maintain
Score Strategic Implications
0-3 Your company is not actively managing your installed applications creating the opportunity for downtime
4-7 Small improvements to the way your product is maintained can result in reduced risk of downtime
8-20 Your company is actively managing your installed application and you have a low risk of downtime
MAINTAIN (a) In UseNo-0 1-Yes
(b) Impact on Revenues Low-2-3-4-High
(c) Score(a) x (b)
Can track and understand all applications installed across enterprise 0 or 1 1 – 2 – 3 – 4 – 5
Can easily discover all available updates for deployed apps across enterprise 0 or 1 1 – 2 – 3 – 4 – 5
Routinely control, manage and test all updates before deployment 0 or 1 1 – 2 – 3 – 4 – 5
TOTAL
The Standard in Software Licensing & Installation Slide 37
SOFTWARE VALUE MANAGEMENT
Is your company extracting the maximum value from its software?
Define Build Market Sell Distribute Service Renew Retire
SVM is a set of activities during the software lifecycle that are focused explicitly on maximizing the value of one’s software.
The Standard in Software Licensing & Installation Slide 38
FOLLOW-UP
SVM Scorecards?
• Send email to [email protected]
Pricing & Licensing report?
• Download at www.SoftSummit.com
Sell SVM software?
• If your company contributes to the Software Value Management chain, we'd like to invite you to a special consortium on Jan 25. Please contact David Rowley at [email protected].