Software metering to trigger SMB app use

Licence compliance and rights management helps unlock demand?

Could budget pressures, the surge of interest in cloud computing and use of on-demand software-as-a-service offerings help accelerate the call for metered software models?

Analysts have suggested that based on past performance, vendors are unlikely to respond with radically new or different licensing metrics, but some software industry executives believe there are new opportunities to be exploited in providing the mechanisms for software metering.

In one recent research note Gartner said that, “Vendors as well as customers want a tamper-proof meter they can trust, but are wary of introducing additional dependencies and costs.”

There is a level of acceptance though that metered pay per use offers could help attract marginal demand from light users and business that want only occasional use of an application, and would not want to pay annual license fees for the privilege.

Companies like SafeNet and Acresso Software already provide some of the functionality ISVs need to be able to control access to commercial applications. 

The products they supply for licence compliance monitoring and software rights management (SRM) programs, are seen as viable tools to help vendors tap into SMB segments for metered occasional use software.

Chris Holland, VP of product management at SafeNet and head of the SRM division, said that rights management tools could be helpful as a key that unlocks a door onto the ‘long tail’ of SMB market demand.

This is some way off current practise. To date smaller vendors and niche product distributors have tended to rely on license keys. Larger vendors or widely used applications more often make the customer responsible for license compliance, reinforced by external software audits.

“There is a broad range of licence options and vendors really have to be able to support them all” Holland said. “I believe we are moving at speed towards a position where the distribution of licences becomes transparent and software is assigned as a usuable resource, rather than associated with a fixed licence issued for each single user.”

The notion is that user rights move from being controlled by a licence on a machine to usage by a user, with different software incurring different rates of different types of user, Holland suggested.

Gartner agrees there is mileage in the idea. “Different tasks have different value; automating the labour of a highly paid technician or legal professional is worth more than automating lower paid administrative tasks such as courthouse scheduling, for example. User-based pricing is less suitable for task automation.”

The conclusion from the analyst is that pay per use presents a new opportunity for vendors to show creativity, and could help drive additional revenue from marginal uses.

SafeNet’s Sentinel RMS toolkit is popular among software vendors for licensing lifecycle management from design to fulfilment, and the technology can be used for ongoing license management and could be adapted by vendors wanting to embed metering features into their packages.

Similarly, Acresso’s Flexnet Compliance Monitor is intended to provide a comprehensive view of how businesses use a commercial software product. 

It is marketed as an opportunity to monetise overuse and unauthorised use, while customers gain a clear understanding of their own usage without the intrusion of a physical audit.

Holland told us that like Acresso’s, Safenet SRM products are used widely to protect software and IP assets, and are used by as many as 25,000 ISVs to distribute their products cleanly and securely, or to manage license use. 

He said the recent merger of Safenet with Aladdin means the company can combine the strengths of the SafeNet Sentinel and Aladdin HASP lines to offer stronger and better software protection, potentially with metering options added.

The company has recently installed Mark Floyd into the CEO hot seat, filling a position that had been vacant since October of 2006. Previously, Floyd served as CEO of Entrisphere, a communications equipment provider, which was successfully sold to Ericsson in 2007.

With nearly $500 million in revenue, SafeNet now claims to be the third largest provider of information security systems for rights management and enterprise data protection. 

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