7 Steps to the Software Licensing (R)evolution


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7 Steps to the Software Licensing (R)evolution: How to Boost Software Profits With New Licensing & Entitlement Best Practices

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7 Steps to the Software Licensing (R)evolution

  1. 1. 7 Steps to the Software Licensing (R)evolutionHow to Boost Software Profits With New Licensing & Entitlement Best Practices<br />Have a Question?<br />SRMQuestions@SafeNet-Inc.com<br />Learn more:<br />www.safenet-inc.com/Sentinel<br />Darim Rahmatallah – Product Management, SafeNet<br />Bastiaan Van Dorsten – Pre Sales Consultant, SafeNet<br />David DiMillo – Principal Consultant, SafeNet<br />
  2. 2. Who is SafeNet?<br />SRM ExpertiseLeader in anti-piracy, IP protection, enterprise licensing, entitlement management and SaaS application management solutions (Sentinel)<br />Global 25,000 customers in 100 countries<br />Employees 1,600 in 25 countries<br />Revenue ~$450 million<br />Position 4th largest global security company<br />Founded 1983<br />
  3. 3. What Are Some Teams Saying?<br />“We need more control over customer usage”<br />Lots of information in small buckets<br />“where do we begin??”<br />“who is going to own this? Not it!”<br />“this is more work than we thought it would be”<br />Result – a bit unorganized and unsure where to start<br />
  4. 4. Process vs. Technology<br /><ul><li>Our clients often think they have a technical problem
  5. 5. That's how they find us!
  6. 6. Its usually more of a process problem
  7. 7. A focus on technology alone ends up in a bad place</li></li></ul><li>Licensing Project Lifecycle<br />1. Corporate Licensing Strategy, Priorities and Vision<br />2. Licensing Philosophies and Policies<br />3. License Model Development<br />4. Licensing Requirement Specification Development<br />Your licensing project leader willdeal with every element of the lifecycle<br />5. Licensing Use Case Identification<br />6. Licensing Technology / Vendor selection<br />7. Licensing Architecture Definition and Roadmap<br />8. Licensing Workflows and Customer Experience<br />9. Licensing Engineering Plan<br />10. Licensing Development & Implementation<br />11. Internal Preparation, Communication and Enablement<br />12. External Licensing Program Roll Out<br />13. Licensing Program Management and Optimization<br />
  8. 8. Business Integration<br />1. Corporate Licensing Strategy, Priorities and Vision<br />2. Licensing Philosophies and Policies<br />3. License Model Development<br />4. Licensing Requirement Specification Development<br />Business Process Integration<br />Technology Integration<br />5. Licensing Use Case Identification<br />6. Licensing Technology / Vendor selection<br />7. Licensing Architecture Definition and Roadmap<br />Gravity<br />8. Licensing Workflows and Customer Experience<br />9. Licensing Engineering Plan<br />10. Licensing Development & Implementation<br />“You likely have as many business process challenges as technical issues”<br />11. Internal Preparation, Communication and Enablement<br />“Technology alone is not going to solve your problem”<br />12. External Licensing Program Roll Out<br />13. Licensing Program Management and Optimization<br />
  9. 9. Why is software licensing a gray area for some businesses?<br />License Enforcement<br />License Back Office<br />IT<br />Sales<br />
  10. 10. Why is software licensing a gray area <br />for some businesses?<br />License Enforcement<br />License Back Office<br />IT<br />Sales<br />
  11. 11. What are these teams really missing?<br />
  12. 12. The Vision<br />“how do all the pieces fit together?”<br />“how is it all going to work?”<br />“what things can we outsource?”<br />“what things do WE have to do?”<br />
  13. 13. Planning Workshops<br />Sales Models<br />Operations<br />Enforcement<br /><ul><li>Begin by starting at the top
  14. 14. How are we selling?
  15. 15. How do we want tosell?
  16. 16. What if you had more control over product behavior?
  17. 17. Fulfillment and Delivery Mechanics
  18. 18. What happens when our sales teams place an order?
  19. 19. What do we want to happen?
  20. 20. How do we want to deliver?
  21. 21. Talk about your customer experience
  22. 22. Licensing Requirements
  23. 23. Where do we add controls?
  24. 24. How do we feel about security vs. piracy?
  25. 25. Technology investigation</li></li></ul><li>Building the Vision<br /><ul><li>Ah… land ho!
  26. 26. I can see it!</li></li></ul><li>CA<br />PM<br />CLM<br />BU<br />Mfg<br />Tools<br />Software Activation - Critical Components<br />Initial Requirements & Platform dependent work<br />Size and Scoping requirements and dependencies, prioritization and Consistency<br />Enabling platform Independent technology & 3rd Party engagement<br />License generator, Install licenses on new devices<br />IOS Infra<br />Cisco Product License Registration Portal<br />Portals for various licensing workflows<br />Cisco.com tools e.g. Feature Navigator<br />Fulfillment<br />Network-wide License Management Tool<br />Customer support and and troubleshooting<br />
  27. 27. Workshop Outcomes<br />On process vs. technology…<br /><ul><li>“When you started with all the process discussions yesterday, I really wondered where it all was going. But now I realize they were exactly the conversations we needed to have”</li></ul>- US Software Vendor <br /><ul><li>“If we are only focus on the technology, we will fail. We have to have a broader view and look at all the processes surrounding the technology”</li></ul>- EMEA Software Vendor<br />
  28. 28. Workshop Outcomes<br />UK CompanyIdentified 4 new ways to sell through the workshop<br />US CompanyCame to the workshop with little idea of how things would work. Had their vision in hand 2 days later.<br />EMEA CompanyIdentified a customer compliance problem during the workshop they didn't know they had<br />
  29. 29. Case Study<br /><ul><li>Vision and business process evolution in practice
  30. 30. Streamlined processes
  31. 31. Consolidation</li></ul>Let’s look at how one company dealt with this problem…<br />
  32. 32. Original State<br /><ul><li>Licensing Landscape
  33. 33. 120 software products
  34. 34. ~$500M in annual revenues for product protected with license enforcement
  35. 35. 3 unique licensing technologies
  36. 36. 3 unique customer experiences for license key fulfillment
  37. 37. License key generation
  38. 38. 50% of all keys generated manually using 13 full time headcount worldwide
  39. 39. Automated tool used for the remaining 50%
  40. 40. Pain Points
  41. 41. Manual license key generation was expensive and slow
  42. 42. Supporting separate customer experiences was confusing and not optimal</li></ul>Manual process = $$$<br />80% of the total cost was in headcount!<br />
  43. 43. Getting Efficient, Y2<br /><ul><li>Major changes
  44. 44. Moved all license key generation to a single, scalable platform with a customer self-service web portal
  45. 45. Consolidated user workflows to a single experience
  46. 46. Reduced licensing support staff by 5 headcount
  47. 47. Licensing Landscape
  48. 48. Consolidated to 2 licensing technologies
  49. 49. Single customer experience for license key fulfillment
  50. 50. Single sales rep experience for issuing evaluation keys
  51. 51. Result</li></ul>Additional spend of $165K in tooling enabled $500K/yr cost reduction in headcount plus delivered a single and much more feature-rich customer experience<br />With a much better user experience!<br />Reduced headcount cost by 38%<br />
  52. 52. Scalability pays off big, Y4<br />Do we need to add 14 more people?<br /><ul><li>Major changes
  53. 53. ISV completed 4 incremental acquisitions
  54. 54. Added 100+ incremental products
  55. 55. Licensing Landscape
  56. 56. Each acquired company had their own license key systems with a total of 14 headcount manually generating keys
  57. 57. Result</li></ul>The ISV moved all 4 license managers of the acquired companies to their corporate standard at minimal cost<br />No!<br />Zero.<br />
  58. 58. Cost comparison<br /><ul><li>The “do nothing” trajectory</li></ul>Had the company maintained multiple licensing systems and manual key generation:<br />Potential run rate<br /><ul><li>Actual performanceScalable customer-self service license key fulfillment system:</li></ul>Actual!<br />
  59. 59. What’s the Lesson?<br />By introducing a self-service entitlement and <br />customer fulfillment portal, the ISV:<br /><ul><li>Reduced licensing support costby 38% in the first year and by 66% including acquisitions
  60. 60. Delivered a single customer experiencefor their entire product portfolio
  61. 61. Developed a scalable corporate standardfor license key delivery
  62. 62. Absorbed multiple acquisitionsat reasonable incremental cost</li></li></ul><li>Centralized License & Entitlement Management <br />IT: One license backoffice system to manage that can support multiple licensing technologies<br />Operations: Single tool for defining licensing models and license definitions<br />End User: Single self-service license management portal<br />Customer Service: Can assist customers with entitlement lookup and activation<br />Sales & Marketing: Track entitlements and activations<br />Product Management: collect and analyze product entitlement and activation data<br />
  63. 63. Sentinel™ EMS in Action<br />Service Tier Nodes<br />ISV User (YOU)<br />ISV App<br />API<br />Runtime<br />Partners<br />SCC<br />Define<br />Load Balancer<br />Entitle<br />Authentication Server<br />Control<br />Report<br />Internal<br />Support<br />Sales<br />Prod Mgt<br />
  64. 64. Why licensing implementations fail<br />Improper focus<br /><ul><li>“Well, this is a development and IT project, right?”
  65. 65. “Engineering our products to use keys solves our problem, right?”
  66. 66. “Our IT guys can easily build a system to deliver keys, right?”</li></ul>Lack of Ownership and Expertise<br /><ul><li>Many stakeholders across the company but no real owner
  67. 67. Leadership by committee isn’t a formula for success
  68. 68. Not considering all the stakeholders and use cases can lead to inadequate designs</li></ul>Not prepared for impact<br /><ul><li>Customer licensing (system down) issues escalate through sales and support quickly
  69. 69. Inadequate business processes lead to confusion and frustration
  70. 70. Poor licensing designs can be slow and expensive to correct after going live</li></li></ul><li>7 Habits of Successful Licensing Implementers<br />They …<br />Have a clear internal owner<br />Have well-defined licensing philosophy and policies<br />Focus on the use cases<br />Focus on data structure and quality<br />Focus on their customers<br />Harvest valuable business analytics<br />Conduct annual business reviews<br />
  71. 71. Complete Software Licensing Solution<br />
  72. 72. Choosing the Right Licensing Models<br />Time limited<br />Shared<br />User reservation<br />Pay-per-use<br />Perpetual<br />Commuter<br />Volume Transaction<br />Licensing (VTL)<br />Hold License / Time<br />(minimize downtime)<br />
  73. 73. Enterprise Features<br />Log file encryption<br />Redundant Servers*<br />(3 - 11 servers)<br />License Revocation<br />Queued Licenses<br />Capacity Licensing<br />Grace Period*<br />* minimize downtime<br />
  74. 74. Advanced Feature Set<br />Advanced Feature Set<br />Standard Feature Set<br />Feature Based Licensing Benefits<br />License multiple modules, components or features within a single product.<br />Always ship entire product allowing access to specific applications only.<br />Deliver upgrades by delivering licence updates.<br />Vendor<br />End Customer<br />¥ £ $ €<br />Activate standard feature set<br />Upgrade to advanced feature set<br />No new software<br />delivery required<br />
  75. 75. Licensing & Entitlement Management<br />Secure Software Licensing Solutions <br />- Out-of-the-box licensing security solution<br />- Flexible, highly scalable, enterprise-grade licensing toolkit<br />Sophisticated Software License & Entitlement Management<br />- Web-based software license and entitlement management system<br />Cloud Services<br />SaaS Licensing & Entitlement Management Services<br />- Packaging, provisioning, metering, and management services <br /> for SaaS applications<br />Software Licensing Professional Services<br />Professional Services<br />- Software licensing consulting and implementation services<br />
  76. 76. Ask the Experts<br />Q&A<br />Please submit your question using the ASK A QUESTION button on your screen<br />
  77. 77. The software licensing community to share ideas, find experts, and learn about the latest trends.<br />SafeNet on the Webwww.SafeNet-Inc.com/Sentinel<br />LicensingLive Blog www.LicensingLive.com<br />Twitter www.twitter.com/LicensingLive <br />LinkedIn http://www.linkedin.com/groups?gid=2878111<br />YouTube www.youtube.com/user/LicensingLive<br />BrightTalk Webcasts http://www.brighttalk.com/channel/5572 <br />
  78. 78. Thank You<br />