So, you’ve been trying to introduce the concept of software licensing into your company. But, you’re not sure of the best way to move the process forward. Maybe we can help. Here’s what we think you should do to get to the finish line.
IT ALL STARTS AT THE TOP
We’re asked this a lot and have assisted many companies in making the transition from “trust-based” to “trust, but verify” with a license manager. To us, the key ingredient in a successful license management project starts at the top: You need executive (hopefully, Chief Executive) support and sponsorship to ensure you gain the benefits available from licensing. Since the decision to adopt license management touches so many parts of your organization, you’ll need to make sure it’s clear to others in your company that a licensing program will not only help increase revenues, but also has visibility at the highest levels of your company.
IT ALSO STARTS WITH JUST ONE PERSON
As important as it is to have executive-level support for your licensing program, it’s equally important to have a single focal point in your organization to be the “go-to” person for licensing. Ideally this person is well-known and respected throughout the organization and has good knowledge of the functional groups that will be impacted by licensing and how they will respond. While neither an MBA nor a Computer Science degree are necessary, being able to both “walk the walk” as well as “talk the talk” are important to lending credibility to your licensing program.
SHOW ME THE MONEY
The focus for the licensing program, ideally, should be revenue- and profit-driven (hence the need for an executive-level sponsor.) There will be an investment made by your company in the form of man-hours devoted to the various aspects of implementing licensing; naturally, there needs to be a payback for this in terms of increased revenue and profitability.
WHAT’S IN IT FOR THE CUSTOMER?
While more money is always a good thing, this shouldn’t come at the expense of customer/end-user goodwill. Remember, software licensing is all about keeping “honest users honest” and giving them an easy-to-use tool to help ensure compliance with the terms and conditions of your existing paper or clickwrap license agreements, as well as to easily acquire more licenses. Taking an overly negative attitude towards customers and end users with your licensing program will be immediately obvious to them and will negate benefits from increased license compliance. Talk to trusted users of your products, or co-workers most in touch with your users (support, sales, etc.) and do a “sanity check” with them on your proposed licensing policies. Obviously, thumbs up are what you’re looking for. While no licensing system will make everyone completely happy, on balance, both revenue and customer satisfaction should go up with a well-done licensing program.
OK, GREAT; SO HOW DO I START?
First, reconcile your current licensing policies, agreements and existing infrastructure (if any) with what your marketing and sales folks tell you would be most desirable. If you currently provide permanent licenses, and see that customers are asking about annual subscription licenses, that’s a good place to start. What about adding floating licensing to your existing per-CPU model? Per user? Time zone based? Do lots of market research, both internal and external to figure out where you want to go license policy-wise.
SO, WHO’S GONNA DO ALL THIS WORK?
Now that you have several great business policies to put in place via licensing, you’ll need some resources. Now’s a great time, if you haven’t been doing so already, to go back to that executive sponsor with a briefing on what may be possible with software licensing. Do a quick “back of the envelope” calculation about impacts on revenue and profitability. No need to make this pie-in-the sky; there will certainly be a short term negative impact to get infrastructure set up, employees trained and the product and documentation updated. However there should certainly be an obvious payback in the one-to-three year timeframe. Now, you get to make your sales pitch: Will your executive sponsor approve the internal resources to implement the needed programs to create your dream software license management program and help ultimately increase revenue and profitability?
Now that you’ve got some people to help you, next you should try to nail down a “ship date” for your product(s) that will have the new licensing scheme(s). It’s quite likely that there’s a new release or two already being sketched out on someone’s whiteboard in the company. Use your charm, or if needed, executive sponsor, to ask about changing that date (or setting a new one in the future) to accommodate your licensing program. On the software engineering side, you’ll probably need a day or so to integrate and test the licensing libraries, change the install routine and document everything.
IF AT FIRST YOU DON’T SUCCEED…
It is possible that there could be some complications in your first rollout of a product with licensing. Hopefully, this will be seen as something that happens normally with software. But, it wouldn’t hurt to try to forsee all possible problems as part of getting ready to roll out licensing. Be sure to have a contingency plan for what happens when a customer is frustrated with getting your software up and running under license management. It may certainly be worth it, long-term, to just give that customer a temporary “everything works” license to get them over the hump and up and running with licensing. You may also want to have dedicated support and engineering resources “on call” when that all-important roll out date arrives. It’s safe to say that you’d be better off having the resources but not needing them due to your brilliant foresight and mitigation of all possible licensing-related problems.
NOW THAT YOU’RE OVER THE HUMP
Don’t forget to brief your executive sponsor on the effects of the rollout of your software licensing program. They were instrumental in getting the program going and they should be able to share the glory of the success of getting licensed products out the door. As part of your rollout plan, put a stake in the ground 30, 60 or 90 days after release to come up with some simple performance metrics. Have support calls gone up or down? What above revenues? If you time your first licensing release to coincide with the beginning or ending of a fiscal quarter, you may be able to get more bang for your licensing buck. Make performance stats available as soon as you can and be sure to publish them inside your company. Even if the numbers aren’t all wonderful, give everyone the story, including plans for future releases with licensing, new licensing models in the queue, etc.
MAKING LICENSING PART OF THE CULTURE
Hopefully, your results will be paid back in the short or medium term. Ideally your company is making more profitable use of the employees and infrastructure devoted to software creation and both customers/users and employees are happy with the decision to go to software licensing. If so, great; to the extent you can, keep doing what you have to push software licensing into more products in your company. Heck, we even know of companies you might think of as “hardware” companies that now treat their physical stuff as platforms for enabling what their customer gets via a software license.
In any case, best of luck in your quest to adopt software licensing. If you have any questions, don’t hesitate to contact us.