SOFTWARE VALUE MANAGEMENT Dan Stickel EVP & General Manager Software Technologies Group Macrovision.

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?


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


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


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


Perpetual versus Subscription: Today

Two-thirds of publishers focus on perpetuals


Perpetual versus Subscription: Tomorrow?

Publishers planning to increase subscriptions


Perpetual versus Subscription: Enterprise View

But enterprises prefer perpetuals…


Publisher License Metrics: Today

Diverse mix reaches diverse buyers


Publisher Licensing Metrics: Tomorrow?

New metrics gaining ground


Publisher License Metrics: Enterprise View

But enterprises still prefer concurrent user…


License Compliance: Today

Mix of techniques


License Compliance: Tomorrow?

Migration to automated software compliance


License Compliance: Enterprise View

Enterprises prefer centralized licensing


Software Maintenance by Customer Type

Consumers pay less … and get less.

Average 21% maintenance


Software Maintenance by Publisher Size

Fairly uniform across publishers

Average 21% maintenance


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


AGENDA



• Case Studies




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.


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




• Case Studies


AGENDA


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.”



“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


“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.”


ProductizePrice & License Distribute Purchase Prepare MaintainDeploy Re-PurchaseEvaluate


MOST ENTERPRISES ARE NOT TRACKING LICENSE COMPLIANCE

“What types of software license information do you track?”


“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


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.”


ProductizePrice & License Distribute Evaluate Purchase Prepare Deploy Re-PurchaseMaintain


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


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


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


AGENDA



• Case Studies



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

? ? ? ? ? ? ? ? ?


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


SVM Stage: PURCHASE

ProductizePrice & License Distribute Evaluate Prepare MaintainDeploy Re-PurchasePurchase

Software Vendor Scorecard


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


(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


SVM Stage: PURCHASE

ProductizePrice & License Distribute Evaluate Prepare MaintainDeploy Re-Purchase

Enterprise Scorecard

Purchase


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


(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


SVM Stage: MAINTAIN

ProductizePrice & License Distribute Evaluate Purchase Prepare Deploy Re-Purchase

Enterprise Scorecard

Maintain


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


(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



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.


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].

SOFTWARE VALUE MANAGEMENT Dan Stickel EVP & General Manager Software Technologies Group Macrovision.

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Transcript of SOFTWARE VALUE MANAGEMENT Dan Stickel EVP & General Manager Software Technologies Group Macrovision.