New Monetization Strategies for Leveraging Technology

© 2014 Flexera Software LLC. All rights reserved. | Company Confidential 1

New Monetization Strategies for Leveraging Technology Cloud, Virtualization, Internet of Things and More


Speaker

Tu Le, Sr. Product Manager, Flexera Software

Responsible for product management for Flexera Software's

FlexNet Licensing technology (FlexNet Publisher and FlexNet

Embedded). Tu has over 14 years of security experience in

Cryptography, Anti-piracy and Software Licensing and

Entitlement Management.


Key Challenges for Application Producers

How do I support the varying

consumption needs of my

enterprise customers?

How do I grab my share of

the $1.9 trillion Internet of

Things market?

by 2020 – IDC, 2013

Internet of

(autonomously)

connected things

30 billion

units

How do I ensure all my IP is

protected and my enterprise

customers are not out of compliance?

How do I delight my

customers to ensure

repeat business?

How do I protect and monetize

SaaS apps as well as products

in the cloud and virtualized

environments?

Monetization

Strategies for

Optimizing

Revenue


What is Driving the Move to Consumption/Usage-

Based Models

• SaaS is evolving beyond user name/login

• Virtualization and cloud are forcing new

monetization and licensing models

• Need for variable, more complex models

• Compliance automation needed

Producer Challenges • Enterprises are asking for it

• Growing demands from enterprise customers to simplify licensing

• Enterprises are out of compliance and don’t know it

• Cloud pricing is expected to be transactional

Enterprise Challenges • Need project-based pricing

• Don’t want shelf-ware

• Want to stay in compliance

• Need flexibility to ramp departments, use multiple devices, etc.

42% of

cloud users

share their login

credentials!


Software-as-a-Service (SaaS) Monetization

Strategies

Move to a Consumption/Usage-based Model • Adopt a pay-for-use, pay-for-burst, pay-for-overage and/or true-up

(trust but verify) model

• Enter new markets and segments with different licensing models

– offer a spectrum of models

• Your customers can consume and pay for products based on

actual usage (eliminating shelf-ware)


Virtualization is the #1 Reason for Accidental Non-

Compliance

• 65% of enterprises want to virtualize their entire datacenter*

• Virtualization penetration has surpassed 50% of all server workloads,

and continues to grow exponentially**

• 12% of enterprises don’t track use in virtual environments***

Producer Challenges • Identity is the primary challenge for licensing in a virtual environment (e.g.

hostid spoofing)

• Fragmentation of virtualization technologies (e.g. VMware, Hyper-V, Xen)

• Software piracy (e.g. cloning a virtual machine is too easy)

Enterprise Challenges • Virtual machine sprawling can cause accidental out of compliance

• Machine-based licensing can get in the way of mobility of virtual machines

(e.g. disaster recovery, replacing/upgrading hardware resources)

*Source: InformationWeek; **Source :Gartner; ***Source: IDC/Flexera Software 2013 Annual Survey


Virtualization Monetization Strategies

Security

User Experience

Machine-based Binding Strategies • Detect-n-deny

• Bare-metal binding

• External hardware binding (e.g. dongle)

Software-based Binding Strategies • UUID

• Microsoft VM Generation ID

• Cloud licensing service


Cloud Computing Versus Virtualization

• Virtualization – Abstracts workloads from hardware

– Resources pooling (e.g. storage, network, etc)

• Cloud Computing – Enabling on-demand network access to a shared pool of resources

– Automated provisioning

– Flexibility to grow on demand and a way to track and charge for resource usage

Virtualization = economics of consolidation

Cloud = agility, economics and optimization


Cloud Computing Growth & Challenges

• By mid-2015, software licensing policy will cause more than half of

organizations to substantially modify their plans for cloud computing

• Nearly half of large enterprises will have cloud deployments by the

end of 2017**

• Public cloud services will reach $47.4B in 2013 and is expected to

be more than $107B in 2017***

Producer Challenges • Existing virtualization challenges

• New models require compliance management changes

• Growing demand for innovative monetization and

licensing models

Enterprise Challenges • Security concerns (#1)

• Integration stability and reliability

• Meeting enterprise/industry standards

Source: * IDC 2014; ** Gartner 2013; *** IDC 2013


Cloud Computing Monetization Strategies

Revenue Optimization

Compliance

Automation True-Up

Subscription

Model Metering


Mobile Challenges & Strategies

Intelligent device manufacturers want to control proprietary mobile

hardware

Strategy

• Provide license enforcement for customers that you want to control

• Offer flexible—enforcement to usage-based—monetization, licensing and pricing to

quickly move into and capture new markets

• Provide a cloud licensing service for enterprises who want simplicity

• Automate device software and firmware updates and get insight on application data

Software vendors want to put software on Google Play or Apple App

Store but they aren’t happy with monetization options

Strategy

• Follow SaaS model—Move to usage-based monetization,

licensing and pricing models

• Offer B2B volume purchasing with entitlements, in-app

activation for control

• License enforcement for customers that you want to control

• Cloud licensing service for enterprises who want simplicity


BYOD Challenges & Strategies

Enterprises want to control deployment on devices (BYOD or

Enterprise-provided)

• Often-disconnected devices

• High volume

• User-based control

Strategy

• Use licensing for activations and periodic check-ins – great for often-

disconnected devices

• Provide a cloud licensing service for enterprises who

want simplicity and a clear view of devices


Internet of Things Challenges & Strategies

• Producer wants to control licensing for connected devices

• Producer wants to grab their share of the $1.9 trillion market

Strategies • License enforcement for customers that you want to control

• Usage-based licensing and pricing for consumption models

• Local license servers for high volumes

• Cloud licensing service for enterprises who want simplicity


Piracy/Out of Compliance Concerns and Challenges

• $62.7B* loss due to piracy – both intentional/unintentional overuse*

• Global software piracy rate at 43%*

• 35% of IT managers say they have written policies requiring them to

use properly licensed software*

• 48% vendors state that competitive IP theft had serious impact to

their business; 63% had reversed engineering challenges**

Producer Challenges • Recoup revenue from software overuse – intentional and unintentional

• Prevent reverse engineering

• Ensure software IP protection against hacking

Enterprise Challenges • Licensing complexity makes staying in compliance difficult

• Prevent out of compliance issues caused by cloud computing, SaaS and

virtualization

Source: * BSA 2013; ** SIIA 2013 survey


Piracy/Out of Compliance Monetization Strategies

Piracy/Out of Compliance Reduction

Compliance

Automation

License Server

In the Cloud Detect & Report

‘Call Home’

Software

Activation


Delight the Customer & ―Make Licensing Easier‖

• In-product activations to make licensing invisible

• Command line tools to automate license management

• Cloud licensing service to simplify installation and

management of license server

• Enable usage-based licensing and pricing to meet the

varying consumption needs of your customers


How Can Flexera Software Help?

Innovative Monetization Strategies

Capture customers with different price

points and unique capabilities

Virtualization On-premises Cloud & SaaS


Solutions Products

Get More Revenue From Your Customers

Flexible Monetization and Licensing Models

• Support the full software monetization and licensing

spectrum—from enforcement to usage-based trust

but verify

• Offer mature monetization models for SaaS

applications as well as apps in the cloud and virtual

environments

• Ensure you get paid for every copy of your software

• Adapt to changing market conditions

Maximize Revenue

• Ensuring compliance with licensing agreements in a customer-friendly way

• Quickly profiting from the cloud, virtualization and new usage-based licensing

models

• Electronically enabling up/cross-selling to maximize customer relationships and

revenues

• Configuring your application to meet different market needs without changing

code

Challenges

http://intranet.acresso.com/Marketing/_layouts/listform.aspx?PageType=4&ListId=31D4E195-1D15-4966-A2D5-6A8142AAE612&ID=971


WORLDWIDE SOFTWARE PRICING AND LICENSING 2014 TOP 10 PREDICTIONS

SOFTWARE LICENSE COMPLIANCE MANAGEMENT: OPTIMIZING SOFTWARE REVENUE AND CUSTOMER SATISFACTION

STATE OF THE CLOUD COMPUTING MARKETPLACE

THE COMING OF THE 3RD PLATFORM AND WHAT THIS MEANS FOR SOFTWARE BUSINESS MODELS

www.flexerasoftware.com

http://learn.flexerasoftware.com/ECM-WP-IDC-Software-Pricing-Licensing-Predictions-2014

http://learn.flexerasoftware.com/content/ECM-WP-Optimizing-Software-Revenue-Customer-Satisfaction

http://learn.flexerasoftware.com/content/ECM-WP-Optimizing-Software-Revenue-Customer-Satisfaction

http://learn.flexerasoftware.com/content/ECM-WP-SW-State-Cloud-Computing-Marketplace

http://learn.flexerasoftware.com/content/ECM-WP-SW-State-Cloud-Computing-Marketplace

http://learn.flexerasoftware.com/content/ECM-WP-IDC-Coming-Of-Third-Platform-Business-Models

http://learn.flexerasoftware.com/content/ECM-WP-IDC-Coming-Of-Third-Platform-Business-Models

New Monetization Strategies for Leveraging Technology

Technology

Transcript of New Monetization Strategies for Leveraging Technology