Flexera Software Playbook Template · of data breaches, security vulnerabilities and reports of...

Are Application

Producers in

“Climate Change” Denial?

A Report by

Are Application Producers in “Climate Change” Denial? –

Contents

Introduction ............................................................................................................................. 3

Part 1: Evidence of Business “Climate Change” – Environmental Risk Factors Posing for

Producers ................................................................................................................................ 3

Opportunities and Risk of Emerging Technologies............................................................... 3

What Impact Will IoT, Cloud, Virtualization and Mobile Have on Producers’ Climate Change

Readiness?.......................................................................................................................... 5

Shifting Customer Demand Creates Instability in Producers’ Revenue Models .................... 9

Enterprise Customers’ Tech Environments Are Also Shifting ............................................. 11

Ignoring the Signs of Business Climate Change, Producers Are Not Adequately Managing

Customer Licenses and their Software Entitlements .......................................................... 13

Likewise Ignoring the Signals, Producers also are Not Adequately Automating License

Management ...................................................................................................................... 14

Part 2: Impact of Business “Climate Change” on Producers .................................................. 16

Climate Change is Contributing to Software License Non-Compliance, Contributing to

Revenue Leakage.............................................................................................................. 16

Software Company Mergers & Acquisitions, Create Disruption for Customers ................... 18

Producers Report Wide Array of Business Climate Challenges ......................................... 20

Producers Are Lagging in Offering Flexible Software Monetization Options ....................... 21

Conclusion ............................................................................................................................ 23

Infographic ......................................................................................................................... 24

Survey Background ............................................................................................................... 25

Methodology and Sampling ................................................................................................... 25

Survey Demographics ....................................................................................................... 25

Location of Respondents ................................................................................................ 25

Respondents’ Vertical Market ......................................................................................... 26

About Flexera Software ......................................................................................................... 29


Are Application Producers in “Climate Change”

Denial? A Report by Flexera Software

Introduction The environment in which application producers create, sell and manage their software is in a state of dramatic and accelerating change. Survival for these producers experiencing this business “climate change” depends upon their ability to read the writing on the wall and address these challenges head-on. To thrive in a dramatically different business climate means adapting business models and operations accordingly, and applying best-in-class people, processes and technology. For producers – business operations revolve around Software Monetization. How do producers adapt to changing technology environments, license their software to maximize profits, protect their intellectual property and keep customers happy amidst the whirlwind of constant and buffeting change? This report examines the new and emerging technology trends that are having the greatest climate change impact on application producers, the struggles they’re facing in the face of software climate change, and some solutions that could make a difference for those producers ready, willing and able to adapt.

Part 1: Evidence of Business “Climate Change” –

Environmental Risk Factors Posing for Producers

Opportunities and Risk of Emerging Technologies

Preparedness is a measure of assessing opportunity and risk, and then acting on the best

information. The impact of new technologies is an essential element of this measurement.

At a strategic level then, a good leading indicator of business climate change preparedness

can be gleaned by examining the trends and technologies in which producers currently see

opportunity and risk. We asked respondents to consider the benefit and risk of a host of

emerging technology trends that are being widely discussed today.

In terms of opportunities – It should not be surprising that producers see the greatest potential

in such categories as providing mobile applications (51 percent), supporting virtualization (45


percent), offering subscription based licensing (43 percent), embracing public cloud computing

(41 percent) and the Internet of Things (IoT) (37 percent), to name a few.

In terms of risk, security topped the list of producers’ concerns. Given the growing instances

of data breaches, security vulnerabilities and reports of malicious code found on corporate

networks, this should also not be surprising. According to the survey, 48 percent of producers

view security as a significant risk. In comparison, other tech trends seem to pose much less

business climate risk to respondents. For instance, only 20 percent of respondents see risk

associated with Bring Your Own Device (BYOD), only 18 percent see risk in providing mobile

applications, and only 17 percent see risk in public cloud computing.

41% 45% 43% 40%30% 24%

37%51%

25%

41% 35% 37% 39%44%

34%29%

35%

32%

18% 20% 20% 21% 25%41% 35%

14%

43%

0%

20%

40%

60%

80%

100%

Do the following technology trends pose opportunity, risk, or both for the future of your

software company?Opportunity

Great opportunity Some opportunity No opportunity


What Impact Will IoT, Cloud, Virtualization and Mobile Have on Producers’

Climate Change Readiness?

Considering the pervasiveness of trends such as the IoT, cloud, virtualization and mobile, we wanted to drill down beyond benefit and risk to examine what sort of impact these trends are having on various aspects of producers’ businesses and operations. Awareness of the impacts is necessary before producers can put into place the necessary systems, processes and technology to leverage the opportunities and mitigate the risks. For instance, is the IoT bringing in new competitors? Helping in the creation of new markets? Affecting product innovation and services offerings? Is the cloud impacting customer satisfaction or security concerns? Is virtualization creating new IP protection concerns? Is mobile impacting producers’ business models or supporting new lifecycle processes? According to the survey, 32 percent of producers said that today the IoT is having a high impact today on customer satisfaction, and 30 percent said it is having a high impact on security. In the next 12-24 months, 16 percent of respondents say that the IoT will cause significant impact around supporting new business models.

17%8% 11% 10% 12%

20% 15% 18%

48%

56%

41% 41%60%

44% 34% 41%47%

36%

28%

51% 49%

30%44% 46% 44%

35%

16%

0%

20%

40%

60%

80%

100%

Risk

Great risk Some risk No risk


With respect to the cloud, 38 percent of respondents said a high impact today is around security concerns. In 12-24 months, 15 percent of respondents say there will be cloud impacts around supporting new business models and lifecycle processes. Concerning virtualization, the largest percentage of respondents, 29 percent, say security concerns are the high impacts today. In 12-24 months, 13 percent say that they will feel impacts around supporting new lifecycle processes. Finally, with respect to mobile, the high impacts today felt by producers include customer satisfaction (34 percent), new product innovation (33 percent) and security concerns (33 percent). In 12-24 months, 17 percent of respondents say they will feel the impact of mobile in both the security arena and supporting new business models.


Please indicate the level of impact that these technology trends are

having on the following aspects of your business:

19% 18%25% 25% 23%

32% 30%25%

17% 14%

24% 27%

27% 27% 26%

21% 23%22%

25%25%

48% 45% 38% 39% 39%39% 38% 45%

42% 47%

9% 10% 11% 9% 12% 8% 9% 8%16% 13%

0%

20%

40%

60%

80%

100%

Increasednumber of

competitors

Creation ofnew markets

New productinnovation

Newsolutions

innovation

Newservicesofferings

Customersatisfaction

Securityconcerns

IP protectionconcerns

Support newbusiness

model

Support newlifecycle

processes

Internet of Things

High impact today Some impact Today

No impact and none expected No impact but expected in 12-24 months

25% 26% 28% 27% 26% 27%38%

28%20% 16%

30%35%

37% 37% 40% 38%

29%

33%

35%35%

33%28%

26% 27% 22% 22% 22% 32%

29% 34%

13% 12% 10% 9% 12% 13% 12% 7%15% 15%

0%

20%

40%

60%

80%

100%

Increasednumber of

competitors



Newsolutions

innovation



Securityconcerns


Support newbusiness

model


processes

Cloud




16% 17% 19% 21%16%

26% 29%24% 21% 17%

36% 35%37% 34%

36%

33% 27%26% 27%

29%

40% 40% 37% 35% 37%33% 35%

41% 40% 40%

8% 8% 8% 10% 11% 8% 9% 9% 11% 13%

0%

20%

40%

60%

80%

100%

Increasednumber of

competitors



Newsolutions

innovation



Securityconcerns


Support newbusiness

model


processes

Virtualization



27% 27%33% 31% 30% 34% 33%

23% 21% 21%

31% 29%26% 30% 30%

33%26%

29% 33% 30%

26% 31% 25% 22% 24%19%

24%34% 29% 33%

16% 13% 16% 16% 16% 14% 17% 14% 17% 16%

0%

20%

40%

60%

80%

100%

Increasednumber of

competitors



Newsolutions

innovation



Securityconcerns


Support newbusiness

model


processes

Mobile




Shifting Customer Demand Creates Instability in Producers’ Revenue

Models

In an earlier era, the manner in which enterprise software was sold and purchased was rather simplistic – a “perpetual” license was typically purchased enabling the buyer to use that software in perpetuity according to the rules (entitlements) found within the software license agreement. While there were many benefits to the old perpetual model, there were also drawbacks. For producers, the primary drawback is that once the lump-sum licensing fee is paid, other than maintenance fees, opportunities for recurring revenue from that customer are limited. For the customer, perpetual licenses require greater up-front investment before the solution proves its value. Moreover, investment in a perpetual license is accounted for as a capital expense (CAPEX) instead of an operating expense (OPEX). Finally, the perpetual licensing model makes it more difficult for enterprises to directly link cost to value received and usage. But the business climate has changed concerning how customers want to purchase software – creating instability in producers’ revenue and Software Monetization models. Demand has evolved to include a whole range of licensing models that enterprises would like to use for their software purchases depending on the circumstances – from perpetual to subscription and usage-based models. According to the survey, producers must now respond by flexibly offering a variety of licensing models to accommodate this seismic shift in customer needs. For instance, today 26 percent of producers say that all of their revenues come from perpetual licenses. Within two years this will decrease to 14 percent. 61 percent say half or more of their revenues comes from perpetual licenses today. Within two years this will decrease to 54 percent. Today only 14 percent of producers say that half or more of their revenues comes from

subscription licenses delivered via SaaS. Within two years this will increase to 21 percent.

Today 20 percent of producers say that half or more of their revenues comes from

subscription licenses delivered via non-SaaS means. Within two years this will increase only

slightly to 21 percent.

Today 17 percent of producers say that half or more of their revenues comes from usage-

based licensing models. Within two years that will increase to 21 percent.


16%

50%

48%

54%

9%

16%

13%

13%

6%

9%

10%

9%

4%

8%

4%

5%

5%

3%

4%

3%

8%

5%

6%

2%

5%

1%

3%

3%

7%

2%

2%

2%

7%

2%

1%

2%

8%

0%

2%

2%

26%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Perpetual

Subscription (SaaS)

Subscription (Non-SaaS)

Usage-based/consumption

What are the current and anticipated breakdowns of your license revenues across the monetization

models listed below? (Columns must add up to 100%)-- Today --

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

16%

37%

42%

41%

10%

12%

13%

17%

8%

13%

9%

12%

7%

14%

10%

5%

6%

4%

5%

5%

10%

8%

6%

5%

7%

4%

2%

3%

8%

4%

5%

3%

11%

2%

2%

3%

4%

0%

2%

1%

14%

4%

4%

6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Perpetual

Subscription (SaaS)

Subscription (Non-SaaS)

Usage-based/consumption

-- Within 12-24 Months --

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

6%

5%

3%


Enterprise Customers’ Tech Environments Are Also Shifting

The environments in which end user organizations are deploying their enterprise software also is a story of shifting business climate. For example, today 75 percent of producers say that half or more of their customers use their software in on-premises, physical computer systems (not virtualized). Within two years that will decrease to 67 percent. Today, 16 percent of producers say that half or more of their customers use their software in on-premises virtualized systems. Within two years that will increase to 19 percent. Today, 12 percent of producers say that half or more of their customers use their software in in a hosted environment, hosted by their software provider. Within two years that will increase to 14%. Today, 7 percent of producers say that half or more of their customers use their software in in a hosted environment from a third-party cloud provider. Within two years that will increase to 11%.

8%

30%

61%

68%

5%

22%

14%

16%

4%

12%

7%

4%

4%

13%

3%

4%

4%

7%

3%

1%

7%

4%

4%

2%

6%

2%

1%

1%

9%

3%

1%

1%

11%

0%

3%

1%

17%

2%

0%

0%

26%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

On-premises physical computer systems (notvirtualized)

On-premises virtualized systems or local private

Hosted by the software vendor

Hosted by a third-party Cloud provider

What is the breakdown of customers currently using your software across the following types of

environments? (Columns must add up to 100%)-- Today --

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

5%

6%

3%


9%

28%

53%

51%

6%

17%

16%

20%

8%

13%

11%

11%

4%

14%

5%

5%

7%

8%

2%

2%

11%

7%

3%

4%

7%

2%

3%

2%

10%

3%

1%

0%

12%

2%

1%

1%

9%

2%

1%

0%

18%

2%

4%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

On-premises physical computer systems (notvirtualized)

On-premises virtualized systems or local private

Hosted by the software vendor

Hosted by a third-party Cloud provider

-- Within 12-24 Months --

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Ignoring the Signs of Business Climate Change, Producers Are Not

Adequately Managing Customer Licenses and their Software Entitlements

Most world-class organizations are adept at reading the signs of the business environment and adapting. For instance, they have largely already invested heavily in automated systems essential to effectively manage and track their operations, customers and the customer lifecycle—the front and back offices. Customer Relationship Management (CRM) and Enterprise Resource & Planning (ERP) systems are the primary tools used by enterprises for these purposes. For an organization to operate without such automation in place in today’s highly automated, hyper-competitive, constantly changing business environment – would be akin to economic negligence. In the software industry, specialized Software Monetization solutions automate these functions as they apply to the software license lifecycle. This lifecycle incorporates operations, licensing and the management of customer entitlements – customer relationship management. The component of a Software Monetization solution that deals with the back office – managing customers, customer self-service, and what customers are entitled to do with the software – is the entitlement management system. Highly specialized and sophisticated, entitlement management systems provide the turnkey automation producers need to effectively manage their customers, provide them the self-service they demand to manage their purchases, and create cross-sell and upsell opportunities. Failure to put entitlement management systems in place exposes producers to myriad problems, from customer service issues to inability to maximize revenue and sales opportunities. Attempting to develop one’s own entitlement management system is akin to a non-software based organization trying to develop its own, home-grown ERP or CRM system – it’s extremely costly, time/labor intensive, requires specialized in-house expertise and ongoing maintenance – and it’s not nearly as effective as simply implementing a third-party system built by experts focusing on this technology. So to do so would be, in essence, denying the reality that specialized automation is available to do the job faster, better, and cheaper. And that is exactly what is happening. According to the survey, the majority of producers still have not automated their back offices by implementing entitlement management systems designed specifically for the software industry. Rather they are either not automating these core functions or they are trying to develop their own systems in-house. For example, most producers, 58 percent, develop and maintain their own entitlement management systems to address at least some of their need. 22 percent, do nothing. 19 percent use a proprietary, custom extension of their ERP/CRM system. Significantly, less than a quarter, only 23 percent, use a purpose-built third party commercial entitlement management system.


Likewise Ignoring the Signals, Producers also are Not Adequately

Automating License Management

The other element of Software Monetization focuses on software licensing – the business

models producers implement around their software to make money from their intellectual

property. Flexible software licensing gives producers the ability to quickly package and

bundle their software products, and make their solutions accessible in all environments in

which customers operate, such as on premises, cloud and mobile. Licensing also helps

producers protect against revenue loss by ensuring only licensed and credentialed users can

access their software according to negotiated software licensing terms, without impacting

usability and customer satisfaction. Licensing also helps producers put into place whatever

enforcement mechanisms they like to prevent revenue leakage – from denial of service to

“pay for overage,” as two examples.

Similar to entitlement management, a producer’s ability to automate licensing by implementing

best-of breed, commercial systems helps maximize efficiency and revenue, while letting

customers buy the software using the business model that makes sense to them. Failure to

automate license management or attempting to build one’s own system, similar to the

entitlement management scenario mentioned earlier, puts producers at significant competitive

disadvantage, as they’re failing to adopt best-in-class business practices.,

According to the survey, this is also a widespread problem. For instance, 61 percent of

producers do not adopt best-in-class automation. Rather, they develop and maintain their

own licensing systems in house to address at least some of their needs. 17 percent do

nothing. And only slightly more than a third – 35 percent – use a purpose-built commercial

licensing technology.

58%

19% 23% 22%0%

20%

40%

60%

80%

100%

Developed andmaintained in house

Developed andmaintained as anextension of our

ERP/CRM system

We use a commercialentitlement management

system

We do not use one

What system(s) do you use to manage entitlements/customer use rights?

(Check all that apply)

Response Percent


61%

35%

17%0%

20%

40%

60%

80%

100%

Develop and maintain in house We use a commercial licensingtechnology

We do not use one

What technology do you use to monetize and protect your software products?



Part 2: Impact of Business “Climate Change” on Producers The first section of this report outlines the tech trends transforming the tech industry, and the failure of producers to adapt by implementing best-in-class automation to monetize and protect their software. In light of this, this section of the report examines the resulting impacts on producers’ businesses.

Climate Change is Contributing to Software License Non-Compliance,

Contributing to Revenue Leakage

Changes in the technology climate means customers now have a variety of ways they can access and use their enterprise software – that may or may not be in compliance with negotiated terms. New technologies and rapidly changing environments are making it easy for customers to inadvertently fall out of license compliance. For instance, have employees downloaded software from the Internet that hasn’t been paid for? Are enterprises virtualizing software in ways that would create additional financial obligation? Are employees sharing access ID’s? There are myriad ways in which customers can, intentionally or inadvertently, use software beyond the terms of their license agreement – software license non-compliance – which can result in revenue leakage for producers. One measure of whether producers are effectively battling the impacts of these business climate change challenges is whether or not they are actually able to identify and recoup all the revenues due them in accordance with their software license terms. Said in another way, is business climate change depriving producers of revenues? According to the survey, software license non-compliance is rampant. 63 percent of producers say that customers are out of compliance – they’re using software beyond what they’re entitled to use.


37%

27%

13%

5%2%

4%1%

3% 2% 2% 3%

0%

10%

20%

30%

40%

50%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Surv

ey

Responses

Percentage of customers using your software beyond their entitlements

Percentage of customers using your software beyond their entitlements: Percentage of

customers using your software beyond their entitlements:

Overall

52%

18%

7%5% 4% 5% 3%

1% 3% 3%0%

0%

10%

20%

30%

40%

50%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Surv

ey

Responses

Percentage of customers using your software beyond their entitlements

In Virtual Environments


Software Company Mergers & Acquisitions, Create Disruption for

Customers

When customers activate their newly purchased software and access it for the first time – the experience they have doing so creates a first and lasting impression of the software producer who created it. The experience customers have managing their licenses and entitlements on an ongoing basis – say through a customer portal – likewise contributes to that customer’s opinion of their vendor. Because software creates a unique customer experience – mergers and acquisitions can cause significant disruptions for unprepared producers. Integrating disparate software products that were created independently can often create a confusing experience for customers – who expect all software coming from a specific vendor to behave the same way. When it doesn’t, customer frustration and dissatisfaction often ensures, creating ripple effects that impact the customer relationship. Software Monetization solutions often play a critical role post-merger or post acquisition, because they enable organizations to standardize licensing and entitlement management across all products – regardless of their origins. This makes activating and accessing software a seamless experience for customers across all products – regardless of when and where the software was created. Standardizing licensing can turn a merger or acquisition, often a traumatic experience for customers, into a non-event. According to the survey, producers are having significant difficulties integrating the licensing

and entitlement management experience of their products post-merger or acquisition. Of the

producers that have merged or acquired software originally developed by other software

vendors, 55 percent say it’s challenging integrating synergistic products from disparate code

bases. 50 percent say it’s challenging creating a unified entitlement management experience

for customers across all products. And 44 percent say it’s challenging maintaining disparate

licensing technologies.


29%20% 17%

26%30%

27%

4%7%

7%

41% 44% 49%

0%

20%

40%

60%

80%

100%

Integrating synergistic productsfrom disparate code bases

Creating a unified entitlementmanagement experience for

customers across all products

Maintaining disparate licensingtechnologies

If you company has merged or acquired software applications originally developed by other software

vendors, indicate the key challenges:

Major challenge Minor challenge Not challenging Not applicable


Producers Report Wide Array of Business Climate Challenges

As noted earlier in this report, producers are lagging when it comes to adopting best-in-class

Software Monetization practices to automate critical operations around software licensing and

entitlement management. The data corroborates that producers are largely suffering as a

result. For example, 58 percent of producers report difficulty enabling customers to manage

their own software entitlements. 55 percent report difficulty ensuring enforcement of their

software licenses in virtualized environments. 45 percent report difficulty protecting their

software against unauthorized use. 38 percent find it difficult to quickly package and bundle

features to create different product versions in order to accommodate changing market needs

or unique customer demands. 35 percent have difficulty managing customer entitlements.

And 33 percent find it difficult to support “try-and-by,” trial and/or evaluation licensing.

21% 17% 15% 16% 16%26%

41% 48%

27%

39%29%

41%

31% 26%

34%

30%

32%

20%

7% 9%

24%15%

23%13%

0%

20%

40%

60%

80%

100%

Quickly package andbundle software

features to createdifferent product

versions toaccommodate

changing marketneeds or unique

customer demands

Manage customerentitlements

Enable customers tomanage their own

software entitlements

Protect your softwareagainst unauthorized

use

Ensure enforcementof your software

licenses in virtualizedenvironments

Support “try-and-buy,” trial, and/or

evaluation licensing

When taking your software to market, please state the ease or difficulty with which you are able to:

Very easy Somewhat easy Somewhat difficult Very difficult


Producers Are Lagging in Offering Flexible Software Monetization

Options

Adopting best-in-class Software Monetization strategies and technology enables producers to very flexibly package and sell their software in myriad ways to appeal to different types of buyers. Automated Software Monetization solutions, as discussed earlier, make it very easy for producers to do so. Producers that have not implemented automation – or those that have built their own systems in house – would have a very difficult time offering the myriad and evolving monetization strategies demanded in a global marketplace, and adapting to a rapidly changing, highly competitive market conditions. For instance, in some instances, the right sales strategy is to offer “freemium” options that would get software into the hands of users for free and allow them to upgrade to paid versions for additional functionality. In others, a “try-and-buy” trial strategy works best. In others, it may be necessary to repackage software to include different functions and features that may be needed to enter into new markets, such as Asia, or address niche demand. The ability quickly and flexibly to offer different licensing models to accommodate constantly changing market conditions is critical to accommodate these scenarios. In a marketplace where producers have largely implemented automation around Software Monetization, one would expect a rich array of Software Monetization strategies in play. In a market where the majority of producers have failed to adopt best-in-class automation, one would expect to see a lack of creative Software Monetization strategies in play. And that is what the survey uncovered. Barely half of producers, only 51 percent, offer “try-and-buy” options. Less than half offer variable licensing models to accommodate customer preference (49 percent). Only 47 percent package different product variants to accommodate unique market needs. Still fewer, 39 percent, offer upgrade paths to more expensive software versions. Only 23 percent offer freemium licenses. And just 20 percent offer mobile versions of their software.


51%

23%

47% 49%

39%

20%

0%

20%

40%

60%

80%

100%

Offer try-and-buy triallicensing (i.e.

temporary license toencourage trial, whichexpires at a specified

time)

Offer freemiumlicense: (i.e. enablefree use of limited

application featuresand functions, withability to upgrade topaid-for, full-function

version)

Package differentproduct variants to

accommodate uniquemarket needs (i.e.unique customerneeds in specific

geography)

Offer differentlicensing models to

accommodatedifferent preferences

(i.e. perpetuallicense, subscriptionlicense, usage-based

license, etc.)

Offer upgrade pathsto more expensive

versions of yoursoftware

Offer mobile versionsof your software

What monetization strategies do you use to maximize your software revenues?



Conclusion Producers are being buffeted by changes in the business and technology climate that have an

ongoing impact on their ability to effectively make money from their software. Shifts away

from perpetual licensing to other business models impact revenue streams and predictability.

Virtualization, the cloud and mobile challenge producers’ ability to accommodate customer

demands while still protecting their intellectual property. And in the face of these climate

changes, producers have largely failed to automate software licensing and entitlement

management – systems designed specifically to provide flexibility, nimbleness, revenue

protection, profit maximization and change protection. It is as if producers are denying that all

of these changes are having any impact on the business.

But the survey speaks for itself. Producers are losing money due to revenue leakage. They

cannot quickly and effectively mitigate the impacts to their customers caused by mergers and

acquisitions. They report widespread difficulty around customer self-service, license

enforcement in virtual environments, product packaging and bundling, and supporting creative

business models like trials and try-and-buy.

One is forced to ask – why don’t producers do more to build flexibility and automation into

their business models? Are they in (business) climate change denial?


Infographic


Survey Background

This report is based on the 2015 Application Usage and Value survey, conducted by Flexera Software.

This annual research project looks at software licensing, compliance and installation trends and best

practices. The survey reaches out to executives at software vendors, intelligent device manufacturers

as well as the enterprises that purchase and use software and devices.

Methodology and Sampling The data contained in this report is based on three Application Usage and Value surveys, one targeted

at independent software vendors (ISVs), one targeted at intelligent device manufacturers, and one at

end-user organizations that consume enterprise software. More than 583 respondents participated,

including executives and IT professionals from 264 software vendors, 172 hardware device

manufacturers and 147 enterprise organizations.

Survey Demographics

Location of Respondents

Of the 583 respondents to the survey, 53 percent reported their division headquarters as being

located in the United States. 6 percent were from India, 4 percent from the United Kingdom, 4

percent from Australia & New Zealand, 3 percent from Germany and 1 percent from France.


Respondents’ Vertical Market

Respondents fell across a wide array of vertical markets. With respect to Enterprise Respondents, 20 percent were from the Business/IT Consulting Services industry, 12 percent from the Government/Public Sector and 10 percent were from the education, Financial Services, healthcare, Oil/Gas/Utility industries respectively.

53%

6%4%

3%3%

2%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%1%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%

Respondents Division Headquarters

United States

India

United Kingdom

Germany

Australia

Italy

Canada

New Zealand

France

Netherlands

Brazil

China

Finland

Mexico

Pakistan

Sweden

Croatia


With respect to software vendor respondents, 17 percent were from the financial industry, 16 percent from consumer, and 13 percent from Healthcare/Medical industry.

With respect to hardware device maker respondents, 23 percent are from the telecommunications/network equipment providers industry, 20 percent from the computer

2%3%

6%

12%

10%

10%

10%10%

10%

7%

20%

Which of the following best describes your organization’s vertical market?

Automotive

Aerospace/Defense

Consumer Goods

Government/Public Sector

Education

Financial Services

Healthcare

Oil/Gas/Utility

Technology

Manufacturing

Business/IT Consulting Services

10%2%

13%

17%

7%8%

5%

11%

2%

6%

6%

16%

Which of the following best describes the type of enterprise software your company develops?

Electronic Design Automation (EDA)

Human Resources Management (IncludingPerformance, Payroll and Talent Management)Healthcare/Medical

Financial (Including Accounting, Billing,Forecasting)Enterprise Resource Planning (ERP)

Customer Relationship Management (CRM)

Product Lifecycle Management (PLM)

Business Intelligence

Database Management (Including MasterDatabase Management)Project Management

Retail

Consumer


equipment and peripherals space, and 20 percent from the industrial/manufacturing automation space.

23%

20%

20%

10%

12%

4%

5%6%

Which of the following best describes your organization’s vertical market?

Telecommunications/NetworkEquipment Providers

Computer Equipment andPeripherals

Industrial/ManufacturingAutomation

Building Automation

Healthcare/Medical Devices

Electronic Test andMeasurement Equipment

Automotive (IncludingInfotainment)

Consumer Electronics (IncludingHome Automation)


About Flexera Software Flexera Software helps application producers and enterprises increase application usage and the value

they derive from their software. Our next-generation software licensing, compliance and installation

solutions are essential to ensure continuous licensing compliance, optimized software investments and

to future-proof businesses against the risks and costs of constantly changing technology. Over 80,000

customers turn to Flexera Software as a trusted and neutral source for the knowledge and expertise we

have gained as the marketplace leader for over 25 years and for the automation and intelligence

designed into our products. For more information, please go to www.flexerasoftware.com.

Flexera Software, LLC

(Global Headquarters)

+1 800-809-5659

United Kingdom (Europe,

Middle East Headquarters):

+44 870-871-1111

+44 870-873-6300

Australia (Asia,

Pacific Headquarters):

+61 3-9895-2000

For more locations visit:

www.flexerasoftware.com

http://www.flexerasoftware.com/

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