Are You Ready for Cloud Computing?
New hardware and software deployment options are challenging traditional software licensing models. Users no longer need to own their hardware infrastructure or get approval to purchase big ticket items like servers and desktops. There is no need to configure these systems and maintain them to run their perpetually-licensed software in-house.
Cloud Computing – Opportunity?
Today, users can obtain “hardware on the fly” to run any operating system on arbitrarily large servers in the cloud. These virtual systems may persist indefinitely or disappear when no longer needed. The software on them may be used for only a short burst of time—just enough to get the job done—measured in days or even hours. Likewise, paying for “cloud-time” is easy, often paying with nothing more than a credit card.
The biggest industry players are driving the cloud movement. Amazon, Google, IBM, and Microsoft leveraged their enormous investment in computing hardware and advanced virtualization software to build on-demand computing platforms. Corporate users, tired of paying to maintain in-house iron, are trying to find ways to reduce cloud computing costs, while they simultaneously simplify procurement, decrease deployment delays, and add unprecedented throughput potential.
Re-think Software Licensing Models
As a result, enterprise-class software vendors are considering new licensing models. Many vendors use subscription-based models where customers pay for software monthly or annually. But, with cloud computing, users may want to pay by the day, hour or minute. This puts a strain on today’s traditional pricing and licensing models on which software vendors’ revenue streams depend. But, cloud computing can open untapped markets for some software vendors’ products, especially those with a high per-seat cost, by providing convenient access to their software on “big iron” at a much lower price point.
Software vendors may need to move toward post-use-billing models at a faster rate. Software applications can connect to a central server to collect usage information, either clock time or a more precise measure of the amount of work (value) that was derived from a usage session.
Keeping up with the Pace of Change
Cloud computing is a disruptive technology that has forced independent software vendors to look for new ways to license their software products. Companies using electronic license management are in the best position to keep pace with—and take advantage of—the ever-changing computing landscape.