As the economy slows down, software vendors must re-think business as usual. This post contains Software Licensing ideas that improve revenues when the economy slows down.
Every software vendor eventually encounters a slowdown at some point. When overall capital expenditures are declining it’s almost inevitable that software vendors will feel the pinch too. In addition to redoubling your efforts to improve your core products, the key to successfully riding out a recession is to adopt new software licensing programs.
Regular readers of this blog already know that the best way to stay agile in this changing world is to integrate a license manager within your software. Here are some specific Software Licensing ideas that improve revenues for your marketing/sales teams to help you grow in a softening economy.
1. New Pricing/Payment Models
Slowing sales mean that it’s time to get creative with licensing. If you are now selling only permanent licenses, consider going to time-limited licenses, both to add recurring revenue and to avoid “giving away” too much value. Try selling annual licenses to reduce the upfront cost of your licenses. Price the annual licenses at a level that will increase your revenue over time. Also consider a pay-per-use scheme for those customers who prefer to be billed that way.
2. License High-Value Components Separately
Some software vendors use an economic dip to decouple some of their high-worth software modules from their basic product so that prices can be reduced on the basic product while still capturing higher revenue from those customers who are will to pay for the more expensive options. The lower cost of the basic version can open up new accounts and increase your market share as well.
3. “Productize” what you used to give away for free
A lot of companies who use a license manager are not, strictly speaking, software companies at all. Many technology companies often “throw in” software as a kind of “enabler” or loss-leader, focusing instead on collecting revenue from hardware sales or consulting fees. Wherever there is perceived value in software, there is also potentially untapped incremental revenue.
4. Increase your Maintenance Subscription Rate
License Managers are very useful tools to ensure that your customers use only the software versions for which they have paid support fees. Try using the version number field in your licenses to encode a support-expiration date in the form yyyy.mmdd (2015.0531). Let a license manager compare it to the “release date” of each version so that your customers must remain current with their maintenance payments in order to access newest releases.
5. Scale your Licenses by Geographical Scope
Use a license manager to restrict licenses by time zone or region to penetrate new markets at a much lower cost. Sales gains can be realized by charging a premium for licenses that allow use across wider geographies. Sell higher priced licenses to organizations whose software usage needs to span wide geographies. Allow these customers to use your licenses as their teams “follow the sun.”
6. Deepen Penetration within your Existing Customers
Often the best source of new license revenue is found within your existing customers. Not all users within a customer are the same. So try creating license classes that are specific to each user type. A license manager makes it easy to build one release image of your product that takes on different functional behaviors (“lite”, “basic”, “advanced” etc.), each one determined by the specific license key you issue. You can later sell upgrades by supplying an additional license key to turn on greater functionality. The pricing of these various classes of licenses should match the value that different user types ascribe to your software. Examine software usage patterns to create a balanced set of licensing options that appeal to the widest audience within your best customers.
7. Lower customer cost by Hosting License Servers in the Cloud
Sales increases can also result by lowering your customers cost of ownership. In cases where your customers prefer not to install on-premises license servers, offer them license servers in the cloud. This may remove barriers that IT groups sometimes erect when they are asked to manage licensed software, speeding product evaluation and deployment. Once licenses are served in the cloud, customers can then expand their usage by simply adding extra licenses to their cloud-managed pool, including new releases and options.
8. Find a lower-cost Software Licensing Vendor
While you are looking for new revenue sources, you might also consider making changes on the other side of the ledger. If you are tired of paying ever higher fees to use your old third party license manager, maybe it’s time to consider a lower cost alternative. Reprise Software is in the sweet-spot in this regard – providing a world-class license management system at a much more affordable price.
The IBM® Platform™ LSF® Family of products has been recently updated and now includes comprehensive support for the Reprise License Manager (RLM).
JTB World adds RLM support to its Usage Reporting Tools
Reprise Software is pleased to announce that JTB World has added support for RLM into its suite of license usage reporting tools.
These tools can be used by you or by your customers to monitor historical usage for departmental charge backs or usage-based pricing models.
You can find out more here:
Please contact JTB World directly for more information.
Tetcos Selects RLM and Activation Pro to Streamline Licensing Operations
We at TETCOS, a niche simulation software firm, have been developing NetSim since 2004 and PhySim since 2009.
In our initial years we used an in-house dongle based license management system. This solution was highly inflexible (for example, there was no possibility of having internet based activation) and prone to communication problems between clients and the license server.
In 2007, we approached Reprise Software, and they responded immediately with a free 30 day RLM evaluation. The RLM product was easy to use with a detailed product manual and their support very fast. In addition, their pricing was affordable, so we shifted to RLM.
Over the last several years, Reprise has continuously added features to RLM which has helped us improved our product offering. Here are a few examples that have helped us meet our customer needs better:
- The internet activation feature for providing easy evaluations to our customers. Rather than physically ship we just send an FTP download along with an activation key.
- License options such as License Roaming, Dongle based licensing, Minimum license checkout time, license sharing within a machine, etc.
- A diagnostic module that logs useful information at both the client and server enabled us to quickly resolve license related issues.
Most importantly, we have not faced any license related issue in the field and Reprise has kept the price affordable. RLM, and timely support from the Reprise team, has played an important role in our success.
Tetcos develops network simulation software, NetSim, and communication simulation software, PhySim and has an extensive and growing set of customers in over 15 countries. Visit: www.tetcos.com
GNS Science reaps business benefits from Reprise License Manager (RLM)
GNS Science had reached a point with our GLOBE Claritas product where our in-house software licensing system was starting to act as a barrier to business. We needed the flexibility of being able to license per user, or per core, as well as offering modular licensing for some key components. We also needed those licenses to be robust, and server based.
With the Reprise License Manager (RLM), we got all of this, and more. We were able to extend our product lines to include high and low capacity solutions at attractive price points, as well as deliver a scalable cloud-based licensing solution. By using Reprise we have been able to unlock whole market segments that we were priced out of with our in-house solution. RLM gives us the flexibility of being able to license per user, or per core, as well as offering modular licensing for some key components, while at the same time providing robust, server based licenses.
The support from Reprise has been excellent, and their pace of development means that we can continue to offer our clients new functionality, such as “roaming licenses” for remote or in-field use.
I would not hesitate to recommend Reprise RLM as an excellent solution for a business-to-business product suite allowing tailored solutions with minimal overhead.
About GNS Science
The GLOBE Claritas seismic processing software is produced by geophysicists who work within the Business Development Group of GNS Science. GNS Science is New Zealand’s leading supplier of earth and isotope scientific research and consultancy services. http://www.globeclaritas.com/
The Reprise License Manager product is capable of supporting many license types. Some are appropriate for standalone, single-user licensing models and others are used to support more complex network licensing and pricing scenarios. Determining when a license server must be installed is not always clear.
So, let’s spend a few minutes talking about the various jobs a license server performs, and when it is needed to support various license types.
Uncounted v. Counted Licenses
The biggest factor that determines whether a license server is required is whether licenses are counted or uncounted. Counted licenses require a license server because it must “count” concurrent licenses. Counted licenses are used whenever the ISV wants to limit or record concurrent license usage. Counted licenses can be identified by a positive integer in the “count” field of the license.
Uncounted licenses, on the other hand, do not require a license server because there is no need to count usage. Uncounted licenses can be identified by the word “uncounted” or or the number “0” in the license count field of the license. Each uncounted license must be node-locked to a hostid. For ease of administration at larger sites, uncounted licenses for multiple computers may reside in a license file that is managed by a central license server, but this is not required.
The other license type that does not require a license server is the “single” license type. This is also a node-locked license, but it can be used by only one user at a time (concurrent count of “1”). The enforcement of “single” licenses is done via file locking, not by license servers.
The RLM License Server
The basic job of the RLM License Server is to service license requests from RLM-enabled client applications over the network. Based on the needs of the application, the license server redirects license requests to the ISV-specific license server which actually grants or denies the request based on what is specified in the license and on the current usage conditions.
License servers also manage “roaming,” named-user, and token-based licenses. They manage held and shared licenses, and offer an admin interface, diagnostic tools, and are responsible for writing debug and report logs.
Using dongles with RLM
The Reprise License Manager (RLM) comes with built-in USB dongle support, meaning that using dongles with RLM could not be easier. Dongles purchased from Reprise can be used as a standard “hostid” to which licenses can be locked. The principal advantage of using dongles is to provide a convenient way for your customers to transfer licenses when machines are replaced or upgraded. Software applications, with a valid license, can be used on any machine as long as the dongle specified in the license is attached.
ISVs who prefer to support their own dongles with RLM can do so by way of an ISV-defined host ID. ISVs can choose a simple, low-cost dongle because RLM needs only the dongle’s serial number at runtime. ISVs then write a routine to retrieve the dongle’s ID and include that routine within the RLM libraries so whenever a license is tied to the dongle, RLM knows how to call the ISV’s routine to obtain the dongle serial number. Example code is provided with the standard RLM SDK to show how ISV-defined hostids can be integrated into RLM.
Ellexus chooses the Reprise License Manager
Ellexus LTD, a software start up from the UK, recently released a tool called Breeze for managing scripted flows such as those used in hardware design and software builds. They surveyed several licensing providers before choosing RLM from Reprise Software.
“Our business has been growing steadily since we purchased the RLM licensing package in January 2011 – you may have seen our article in EEtimes,” said Dr. Rosemary Francis of Ellexus. “We have been very happy with Reprise and so far it has been well received by our customers. It was really easy to integrate into our product and straightforward to cut new licenses. Our customers have large computing infrastructures that mean that they need a robust floating license model that gives their teams flexibility and cuts down on administration cost. The simplicity of the Reprise setup procedures has made their lives – and ours – easier. ”
Breeze is designed to help customers understand complex software flows such as scripted builds and compilation flows. Breeze traces the interactions between programs, scripts and data to help develop and debug mix-vendor and mixed-language builds. It helps to automatically document flows as a means to package up solutions for third parties and remote engineers or to understand a new flow from a customer or vendor. Breeze can be used to troubleshoot issues with compiled and scripted flows and is language independent. It works on your existing system and gives you an overview of the system as well as detailed information for debugging.
Reprise Software has expanded its product line to address license usage reporting and pay-per-use needs of current RLM and FLEXlm/FLEXnet ISVs.
Reprise Software has recently become a global reseller of LicenseTracker’s LT-Analyzer license usage analysis tool enabling your customers to understand their license usage and for you to implement usage based pricing models.
This new product supports both RLM and FLEXlm/FLEXnet. RLM’s report log format is supported as is, and FLEXlm ISVs can take advantage of this new product simply by integrating a small piece of open source enhanced reporting code into their existing FLEXlm/FLEXnet vendor daemon.
By delivering reporting tools, ISVs can let their customers produce license usage reports to support current pricing models. Reports can be used as hard evidence to support fact-based software pricing negotiations, especially at the largest customers.
Usage based pricing can complement current license models. Time or some other metric that fits your licensing strategy can be measured to ensure that customers pay for what they use.
This tool also allows end customers to assign costs to licenses and to monitor usage versus a set budget, and to assign costs across departments or business units who share common pools of floating licenses.
For those ISVs planning to host license servers for “in-the-cloud” customers, LT-Analyzer can be used in-house to collect license data to produce billing reports based on actual cloud-based usage.
The LT-Analyzer product imports RLM report logs and/or enhanced debug log records produced by modified FLEXlm license servers. Useful reports are produced by aggregating logged usage data during the billing cycle.
Global licenses for LT-Analyzer are based on a scaled-revenue tiers, much like RLM and FLEXlm/FLEXnet.
Please contact Reprise Software for more information about functionality or pricing, or to arrange a demonstration.