Eight Issues That Impact Retention, Profit and Your Ability to Compete in Today’s Tech-Centric Marketplace

1. WHITEPAPER
Software Updates and the
Customer Relationship
Eight Issues That Impact Retention, Profit and Your Ability to Compete in
Today’s Tech-Centric Marketplace

2. Flexera Software: FlexNet Connect White Paper Series2
Why you should care about software updates?
While one might expect that only software vendors would
care about software updates, it turns out that many intelligent
device manufacturers and enterprises are also in the software
business today. In fact, many intelligent device manufacturers
provide customers with software add-ons, firmware updates
or embedded software in hardware products. And, many
enterprises develop custom applications for use by internal
staff and independent dealers or distributors. In all these cases,
there’s a growing need to manage the development, delivery
and support of software on a regular basis.
In today’s relentlessly changing business environment, this
software has to be updated constantly. Features have to be
added to address evolving needs. Fixes have to be provided
to resolve quality and security issues. Updates to your software
may also be required because of how other vendors have
upgraded the other “moving parts” in the IT environment.
Many software vendors, intelligent device manufacturers and
enterprises view software updates as an afterthought. But, in a
business environment that is becoming increasingly dependent
on software applications and devices with embedded software,
the need to quickly and accurately deliver new capabilities in
a cost effective, low-touch manner is critical to delivering an
exceptional customer, partner and employee experience.
The consequences of an inadequate software update process
can include:
Dissatisfied Customers
If your software updates are too intrusive, too frequent, don’t
work properly, or aren’t properly supported, your customers can
quickly become dissatisfied. This can lead to the loss of their
business—even if they don’t have any major complaint about
your organization’s core products and services. Dissatisfaction
also results if your software updates don’t consistently address
what customers perceive as your software’s worst deficiencies.
Reduced Profits
The more software versions you have in your installed base,
the greater your development, delivery and support costs. Not
having an efficient software update process and policy can
drive up your operating and support costs. In addition, you
are probably missing out on maintenance revenues if
you deliver updates to customers that are not paying for
software maintenance.
Lost Market Share
Companies compete with each other based on their
performance across the entire spectrum of value attributes.
So if your organization can quickly and cost-efficiently roll out
updates that are well-aligned with the changing needs of your
customers, partners and/or users—and do so consistently—you
will gain a sustainable competitive advantage over those
that cannot.
Increased Risk Exposure
Problems with software updates can expose your organization
to all kinds of business risks—such as interruptions of service,
liability for customer business losses, erosion of brand value,
and exposure of confidential information. An optimized update
process substantially mitigates your exposure to these potentially
costly risks.
For these reasons and others, every organization should invest
in the optimization of its software update process. Failure
to eliminate any shortcomings in this process will almost
certainly have an adverse impact on your top- and bottom-line
business performance.
Why is software updating such a challenge?
Your software update process doesn’t just require attention
because of its potential impact on your business. It also requires
attention because it is an inherently complex process with many
potential opportunities for inefficiency and error.
Several factors make software updating especially challenging
and prone to problems, including:
All Software Updates are Not Equal
The chart on the next page provides a basic taxonomy of some
of the update types you may have to manage.
Software Updates and the Customer Relationship
Eight Issues That Impact Retention, Profit and Your Ability to
Compete in Today’s Tech-Centric Marketplace

3. Software Updates and the Customer Relationship
3Flexera Software: FlexNet Connect White Paper Series
Type Description
Major
upgrade
Substantial functionality update that
warrants designation as a new main
version (e.g. from 1.0 to 2.0)
Minor
upgrade
Less substantial functionality update that
only warrant designation as a “point”
release (e.g. from 1.1 to 1.2)
Patch An update that may address a functionality
shortfall or problem—but that does not
qualify as a “point” release5
Hot fix An update to a specific file such as a
dynamic-link library (DLL) or application
programming interface (API)
Service Pack A collection of software patches, hot fixes
and other changes released at a scheduled
or ad hoc interval between upgrades
The timing of these different types of updates are driven by
different conditions. A major upgrade, for example, may be
driven by how quickly your development team can complete
coding and testing of all components—whereas a hot fix may
be driven by a problem that has to be remedied as soon as
possible. Tracking, scheduling and coordinating these multiple
types of updates makes the software update process far
more complicated.
Software Updates Require Involvement from Multiple Groups
Software updates involve more than just developers sitting in a
room and writing code. First, your organization has to figure
out what should be in the next update—whether it’s a major
upgrade or a hot fix. Product managers, marketers, salespeople
and customer support staff need to be included and help define
the software update requirements. Technical architects may also
have to be involved before coding starts to ensure that updates
and upgrades don’t violate critical design constraints that can
affect performance and scalability. Third parties may also have
to be involved, since it is becoming increasingly commonplace to
outsource at least some portion of software development.
After developers complete their coding, that code has to be
tested—and support staff has to be appropriately notified
and trained so that they can provide any technical assistance
customers may need with the install and the new functionality.
Salespeople and account managers also need to be informed
about updates, since they are often the ones customers come
to first with questions or problems. Major upgrades may even
require the involvement of C-level executives—since such
upgrades may play an important role in your organization’s
business strategy.
The appropriate participation of all these parties-of-interest
doesn’t just happen. It has to be carefully orchestrated. If it isn’t,
your front-line staff can be blindsided by unanticipated customer
issues—and, even worse, your updates may not even address
your customers’ most pressing needs.
All Customers are Not Equal
In a perfect world, your customers would be only too happy to
install updates that enhance your software. They would install
every update as soon as it became available. And, their IT
environments would be so stable and homogeneous that updates
would never create unanticipated issues for your own software.
This, of course, is not the case. Customers are different, and they
have their own preferences when it comes to the frequency and
acceptability of updates. That’s why your organization has to be
customer-centric with respect to software updates, ensuring that
update content, timing, installation requirements, and support
policies are in line with customer needs.
Resources are Finite
In most organizations, resources are already stretched given
the increasing complexity of the software and the computing
environments into which that software is now typically installed.
Without a coherent updating process, these limited resources
can easily be wasted on unproductive and/or redundant
activities. Critical tasks such as quality assurance can wind up
short-changed. Such outcomes are unacceptable in a business
environment where software functionality is revenue-critical—and
where customer expectations regarding software quality and
reliability continue to rise.
While much of the above material focuses on external customers,
many of these same issues apply to software you develop
for internal distribution. User acceptance is critical if your
organization is going to get maximum return on its investments
in custom software development. Plus, many business units now
behave essentially like internal “customers”—resorting to external
software vendors if they are dissatisfied with the value and
service they get from corporate IT.
The growing importance of the software application to the
business and the growing challenges associated with the
consistent delivery of an excellent software update experience
make it clear that every organization needs to give reasonable
attention to its software update process.
What does A Best-in-Class Software Update Process Look Like?
Given that improvements in your organization’s software update
process can make it more successful, then it makes sense to
consider what a best-in-class software update process would
look like.
Here are eight best practices to consider when examining your
organization’s current processes:
1. Rationalized, Customer-Focused Requirements Process
Every organization should have a structured process in
place for gathering input from customers, technical support,
sales, marketing, and executive management. Such a
process enables the product management team to make
informed decisions about what new and/or enhanced
functionality to prioritize. Without such a process, important
functionality can be inappropriately delayed—while
development and delivery resources are inappropriately
allocated to less important items.

4. Software Updates and the Customer Relationship
Flexera Software: FlexNet Connect White Paper Series4
2. Well-Defined Version Numbering
Numbering conventions are critical when it comes to
effectively managing software updates and delivering
quality technical support. Organizations sometimes push
out small software patches without assigning them a number
at all, which can make the support staff’s job much more
difficult. Development shops that use Microsoft Software
Installer (MSI), on the other hand, have to conform to its
Major.Minor.Upgrade numbering format. To keep support
costs and calls in check, it is essential to number all
upgrades in a consistent and logical manner.
3. Clear Frequency/Installation Policies
Customers have plenty to do besides maintain your
software. Yours is also not the only software they have to
maintain. So it’s important not to overwhelm them with
frequent updates and/or updates that require much time
and energy on their part (i.e. a full MSI package vs. a
self-extracting .exe). Customers’ tolerances for update
activity also varies depending on a number of factors—
including how essential they perceive your software is to
their business. You should therefore adopt software update
policies that are driven by these customer tolerances and
industry standards.
4. Appropriate Communication and Transparency
Your organization should establish simple procedures for
notifying all appropriate internal and external stakeholders
about software update content and scheduling. This prevents
technical support and account managers from being
blindsided when customers reach out to your internal team
with issues. Proper notification gives sales and marketing
the opportunity to leverage planned new functionality to
help close deals and gain a competitive edge.
5. Diligent Testing/Quality Assurance
Given their workload, it can be tempting for development
teams to skimp on testing updates—especially when
those updates involve relatively small amounts of code.
But experience reveals that sometimes even the smallest
of updates can wreak havoc if those updates are not
adequately tested. Inadequately tested updates cause
unacceptable interruptions of service, they undermine
customer relationships, and inhibit the acceptance of future
updates. Rigorous adherence to software test and quality
assurance best practices is thus essential for any and all
software updates.
6. Coherent Software Licensing and Pricing Strategy
While it is reasonable to provide free updates and
upgrades for a period of time, the value provided by
improvements and new features added to your software
product may eventually warrant charging additional fees.
It may also make sense to treat some updates as separate
functional modules that are licensed separately. As a result,
you need to make sure that you have a software licensing
and pricing strategy to support your software update
process and policy.
7. Clearly-Defined Software Lifecycle with Policies for End-of-
Life and End-of-Support
As new updates are rolled out, you may also have to
decide which older software version(s) you will continue to
support—and which ones you will not, a sensitive issue if
your organization provides software as part of a broader
set of products and/or services. But it is simply not practical
or cost effective to keep your technical support staff fully
trained in many versions of your software. And because
older versions may also not be compatible with newer
components of your customers’ computing environments, it is
essential to have a clearly-defined software lifecycle policy.
8. Customer-Centric Update Experience
There are also a wide range of technical considerations
involved in fully optimizing the software update process in
order to safeguard the quality of the customer experience
while delivering the greatest possible value in terms of
functionality, performance, reliability, security and ease-of-
use. These considerations include:
• Are you going to ensure that customers can abandon an
update if they encounter a problem?
• How will you ensure that a failed update installation
won’t disrupt the customer’s ability to use your product?
• Will you enable customers to easily “roll back” to a
previous version of your software if they are not happy
with an update after they have installed it?
• Are you going to digitally sign your software updates?
• Will you make it easy for customers who have missed
several recent updates to get current in a single operation?
• Will software updates have to be “unpacked”
before deployment?
• Can you automatically check for other installed
components, operating system versions, or other
resources that may affect update installation?
Customer-centric updates should be determined based on actual
customer preferences and market pressures—rather than on the
whims and exigencies of your development team.
The above is not an exhaustive list of all the issues associated
with software updating. It does, however, provide clear
evidence that your organization should probably engage in
some thoughtful, collaborative planning if you want to ensure
that your software updating makes a positive contribution to the
performance of your business.
Why Should You “Buy” Versus “Build” a Software
Update Solution?
With many business needs competing for your organization’s
finite resources, it is reasonable to ask why investing in a
software update solution should be given priority. And secondly,
you must ask yourself, do you build a software update solution
using internal IT and development resources or purchase a
commercially available software update solution. A strategic,
best-in-class software update solution is critical to your

5. Software Updates and the Customer Relationship
5Flexera Software: FlexNet Connect White Paper Series
organizations ongoing success for ensuring customer
satisfaction and retention, while helping you to increase
profits and market share.
While some choose to develop their own software update
solution and then try and maintain it over time, many
organizations find that this option requires too much drain on IT
and development resources. In fact, most organizations realize
that a best-in-class software update solution offers so much more
than just software updates. A strategic software update solution
offers a wide range of benefits that, when combined, create a
very compelling case for investing in a commercially available
solution, including:
Satisfied and Loyal Customers
Your customer’s experience with your software updates over
time is central to their overall experience. When you improve
your update process, you don’t just improve the mechanics of
installing periodic updates, you also improve the content of your
updates—which is a core element of your value proposition—
as well as your ability to provide technical support for those
updates. All of this translates into happier, more loyal customers.
Higher Profits
A disciplined update process simplifies development, drives down
support costs, and helps prevent unlicensed use of intellectual
property. Improvements in your update/upgrade content also
helps increase the total value your organization delivers to the
customer—which helps protect your pricing levels. Together, these
benefits increase the profitability of every customer.
Gain Market Share
In an increasingly crowded marketplace, it is critical to
differentiate your organization’s product and brand. A strategic
software update solution does this by providing key in-product
messaging to your customers while they are using your product,
which results in a better customer experience and more cross-sell
and up-sell opportunities for your products and capabilities. By
better aligning your software’s functionality with your customer’s
real needs you will see increased sales of your product’s features
and functions.
Reduced Business Risk
Problems with software updates can expose your organization
to all kinds of business risks—including those resulting from
updates that don’t work right or that create information security
exposures. By minimizing the likelihood of these problems, an
optimized update process can mitigate exposure to financial,
reputational, and legal risks.
Improved Productivity and Collaboration
A strategic software update solution helps people from all areas
of your business collaborate more effectively to understand and
meet your customers’ needs. It also helps support staff, account
managers and others become more productive by not wasting
their time chasing down information on planned updates or
solving installation problems that could have been avoided.
The magnitude of all these benefits will only grow as usage
of software applications become even more dominant in the
day-to-day work lives of customers, partners and internal end-
users. That’s why, in an increasingly tech-centric marketplace,
it behooves every organization to re-evaluate its approach
to software updating—and to optimize its update processes
wherever it makes good business sense to do so.
FlexNet Connect — A Strategic Software Update Solution
from Flexera Software
FlexNet Connect enables you to lower software delivery and
support costs, grow maintenance and cross/up-sell revenues
as well as drive better product decisions through installed base
insights. FlexNet Connect automates software and firmware
updates, software patches, data and marketing messages
while providing rich reporting and business analytics on your
installed base.
FlexNet Connect gives you the power to keep your users
updated and informed while providing data on how they
use your software, which is invaluable to strategic product
development and marketing.
Derive Deep Customer Insights
• Better understand your installed base with data on total
customer size, versions in use, and upgrade patterns
• Learn how customers value your software by seeing which
features are most popular
• Use real customer data to create better marketing campaigns
and more competitive products
Cut Costs with Electronic Software Updates
• Cut support costs by keeping users on your most current version
• Reduce product fulfillment, software upgrade delivery, and
renewal costs
• Increase customer satisfaction by proactively delivering
electronic software updates
Improve Customer Communication with In-Product Messaging
• Deliver marketing messages to customers and evaluators as
they use your software
• Target users based on their product version, location,
entitlement status, and more
• Reach all of your customers directly, even if they purchased
through a reseller
FlexNet Connect is a key component of the FlexNet Producer
Suite, and is available in the cloud or as an on-premises solution.
FlexNet Connect keeps your support costs down and your
customers happy.
About Flexera Software
Flexera Software helps application producers and enterprises
increase application usage and the value they derive from their
software. Our next-generation software licensing, compliance
and installation solutions are essential to ensure continuous
licensing compliance, optimized software investments and to
future-proof businesses against the risks and costs of constantly
changing technology. Over 80,000 customers turn to Flexera
Software as a trusted and neutral source for the knowledge and
expertise we have gained as the marketplace leader for over 25
years and for the automation and intelligence designed into our
products. For more information, please go to:
www.flexerasoftware.com

6. Flexera Software LLC
(Global Headquarters):
+1 800-809-5659
United Kingdom (Europe,
Middle East Headquarters):
+44 870-871-1111
+44 870-873-6300
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Pacific Headquarters):
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For more office locations visit:
www.flexerasoftware.com
Copyright © 2015 Flexera Software LLC. All other brand and product names mentioned herein may be the trademarks and registered trademarks of their respective owners.
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