Recommended
More Related Content
Viewers also liked
Similar to 'E-CANCER' by Mike Parker - Sick or Treat Sessions
Similar to 'E-CANCER' by Mike Parker - Sick or Treat Sessions (20)
More from RareCancersAustralia
More from RareCancersAustralia (6)
Recently uploaded
Recently uploaded (20)
'E-CANCER' by Mike Parker - Sick or Treat Sessions
- 1. eCancer: Licensing Software IP MikeParker October2015
- 2. Agenda 1. Product Attributes 2. Product Initiatives 3. Evolution of Software Licensing 4. Moving up the value chain 5. If Drugs Were Software 6. Emerging Licensing Trends
- 3. Product Attributes High Up-Front Research Costs Iterative Development Process Low Distribution Costs High Piracy Risk Look Familiar?
- 4. Research Labs Customer Research Market Trends Research laboratories developing point solutions with no immediate use Asking customers what they want Identifying future requirements to stay ahead of the game Product Initiatives
- 6. Retail/FPP Multi- Licence Pack Volume Licensing Site Licence Activation Evolution of Software Licensing
- 7. Moving up the value chain
- 8. If Drugs Were Software Target Customers Requirements Discrete Licensing Volume Licensing
- 9. Emerging Licensing Models Monthly/Annual Subscriptions Ad-Supported Freemium Value Sharing
Editor's Notes
- Richard has asked me to come and discuss with you how a different industry, in this case the IT industry, looks to bring products to market and license its IP. I appear to be the only person in the room without the words "professor" or "doctor" in front of my name, and I am in now way an expert in the pharmaceutical industry. Where my expertise lies is in negotiate hugely complex licensing arrangements with governments and large corporations across Asia. Today I would like to take you on a journey and draw some parallels between the IT and pharmaceutical industries. Before I go further, it is important to acknowledge that treating sick patients is a far more important issue than buying the latest version of Windows. Understanding that, I hope I can provide a new perspective and leave you with some food for thought.
- Many of you will be asking "what has software got to do with drugs?" Software and drugs, conceptually, actually have a lot in common in their life cycles: High up-front research costs. MS spends Billions annually and is one of the largest R&D Iterative development process Price of the finished good is not dependent on the cost of production In both cases, the price of the final product is essentially a fee to license the intellectual property encapsulated in the product. High rates of piracy
- Research labs develops an idea of something pretty cool (MSR/Google Labs). Some widget or process that serves no immediate use in its own right, but may get pulled into a product at some point in the future. A lot of work into user interface design. Holographic computing. Some never find a market or use at all. Product Groups conduct market research to determine a market need before or during development cycle. Windows Insider example. 7M. Leap frog the competition. In hockey parlance, move to where the puck will be, not where it is. Risky, but hugely beneficial if correct.
- The market dichotomy: In many cases, customers don't know what they want before they have seen it. Something new fires the imagination and you wonder how you ever lived without this new thing. In my job, we use a lot of pre-release software and are always on the latest versions of software – often time before they are released to the public. Sometimes it is actually very difficult when using an older version to get anything done. When I was putting together his deck, I was astonished to discover many new features in PPY I never knew I needed. Sometimes customers ask for the wrong thing. The market may well have moved on by the time your product comes to fruition.
- Evolution of Software Licensing Models: Retail/FPP - one physical product/one license. Distributed on physical media Multi-licence Pack - one physical product/5 licences. Volume Licensing - one product/VL key unlocks distribution/report usage Unlimited/site licence - fixed price for term of contract to use agreed portfolio of IP. And coming full circle, we are now seeing a move towards an Activation model - download/purchase individual key Different customer segments have different needs and challenges. In each case, we are looking for the right balance between ease of use for the customer and the need to protect the IP investment, while providing fair value to those legitimately use our software & services.
- No longer are we content to provide the individual building blocks; we are looking to provide full value services. With the move to online services, the distinction between product/service/content becoming increasingly blurred. The move up the value chain provides benefits to both the supplier and customer. It provides budget certainty for the consumer and a shift to ongoing annuity revenue for the supplier.
- So with that background in mind, how might a successful software company look to bring a cancer drug to market if it were a piece of software. Identify target customers - in the case of a cancer drug, that would be the various governments around the world in an attempt to get it on their equivalent of the PBS. In our world, the government is acting as the ISV/SI in this case. The software company is providing a piece of technology (the drug), while the government is building a system to produce beneficial health outcomes for its customers (citizens). Work with those governments to identify their requirements/success factors. What are the political objectives/ budget constraints/relationship desires/outcomes Depending on the desired outcomes, the licensing approach may be very different: Some may continue to operate in the traditional manner, build their own solutions with on-premises software (pay per pill) Pay per user (regardless of usage). Licensing costs on number of patients treated Site license - fixed price for X years to use agreed portfolio of IP. Up to the government how it gets used. Looking at recouping IP investment. There may also be supplemental fees to cover distribution per prescription.
- Similar to the pharma, IT is rapidly evolving, and we have had to develop new licensing models. If you think had enough, we can apply these ideas to pharmaceuticals too. Monthly/Annual subscriptions. Unlimited consumption provided as long as you pay. Stop paying, service turns off. Ad-supported services - can be subtle or intrusive, targetted or broad. Imagine having the cost of your drug course subsidised by watching sponsored advertisements. Freemium - base functionality free, pay to unlock premium features. Free trial? Value sharing - outcome based. Payment based on a measurable quantity of successful usage. As a radical approach, the fee paid could be based on increased survival rates.
- I must stress that the suggestions during this presentation are not based on specific MS licensing models, but rather on ideas that are used across the industry in various markets. Please don't call up your MS account manager tomorrow and ask for a site licence – refusal may offend. As I said at the start, I don't pretend to suggest I have the answers to challenges faced by the pharmaceutical industry and government in providing expensive drugs to patents in need. One thing the IT industry is good at is finding flexible solutions to licensing its wares in different circumstances. We borrow ideas from other industries, and if the pharma industry and government were jointly prepared to explore new ideas, there may be alternatives to paying for drugs one pill at a time. I hope this has been of interest, and I will now hand over to Dr Nick Chapman to explore alternative funding models.