Just-In-Time Licensing

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Just-In-Time Licensing

  1. 1. Just-In-Time LicensingHow new business models are changing Pricing & LicensingTimothy Willey Forward-looking Statements: Any forward-looking indication of plans for products or programs is preliminary andSenior Director all future release or delivery dates are tentative and are subject to change. Any future program plans, or release of a product or planned modifications to product capability, functionality, or feature are subject to ongoing evaluation by Symantec, and may or may not be implemented and should not be considered firm commitments by SymantecOffice of Pricing and Licensing and should not be relied upon in making program participation or product purchasing decisions.SoftSummit, October 26th, 2011 1
  2. 2. What Is An Entitlement? What Which Who? has Rights? to Product/Service? • Customer • Agreement Type • Product • Service – Account – Use – Type – Upgrade Insurance – Contact – Re-license – Feature – Technical Support • Partner – Replicate – Version – Content – OEM – Re-sell – Model • Professional Service – Reseller – Rent – Meter • Software-as-a-Service – Distributor – Support • Terms & Conditions forHow Long? How Many? How Much? • Perpetual • Quantity • Price • Term/Date • Contract 2
  3. 3. Managing Software Entitlements today is as simple asbalancing Demand with Supply… Demand Supply What do I need? What do I own? Huh?  Challenges and risks Customers and Partners 3
  4. 4. These traditional software issues can cause customerheadaches across the Entitlement Lifecycle How can I check what I Customer already own? Entitlement How do I get my software? Lifecycle Purchase Renew Download What if I’ve over-deployed? What about keys? Upgrade Activate What are my upgrade and Can I track my Get Help Manage deployments? cross-grade rights? Where do I go with an issue? 4
  5. 5. Are the heart of these issues is the concept of theSoftware Business Model… The Software Business Model $$$ = Revenue Value Proposition - Costs Delivery Model 1 Segment Needs 4 Sales Channel 2 Competitive Offering 5 Service Delivery 3 Pricing & Licensing 6 Support Model 5
  6. 6. This Business model is changing rapidly, adding to thelist of challenges for Pricing & Licensing On-Premise Virtual & Mobile Private Public Model environments Cloud Cloud Business Impact for Model Pricing & Evolution Licensing Traditional Emerging MarginRevenue Drivers Segment Needs On-premise software Multi-device services focus Offering License + Maintenance Hosted Solutions More Pricing & Licensing Perpetual + Renewals Subscription + Usage Complexity Channel Model Direct + 2-tier Direct + Multi-tier + MSP More SKUsCost Drivers Delivery Model On-premise In the Cloud Support Model Reactive In product and proactive Less time 6
  7. 7. There are 3 stages to addressing these challenges Synchronize Demand Optimization Just in Time Standardize Licensing 2-handed clapping Simplify Centralize Pricing & Licensing Simplify Standardize Synchronize Supply Optimization 7
  8. 8. The starting point is to realize that in mostinstances “less is more” HIGH Overly simplified approach leaves Optimal money on the table Position Overly complex approach (MC<MR) (MC=MR) drives down customer retention and increases Value to operating costs (MC>MR) Software Vendor Most software vendors today LOW LOW Complexity of Product SKUs HIGH and Pricing MC = Marginal Cost MR = Marginal Revenue 8
  9. 9. To address complexity, pricing and licensing needs to be centralized within the organization SKU and Price creation process Leads-to-Renewals • Define strategy, policy and standards Life Cycle • Simplify and reduce SKU volumesNew product • Manage exceptions via Executive Committee releases Channel Price list Book Fast-lane orderNew business process $ models $ Sales Provide in-life $ tools and Fulfill $ support Deliver M&A Exceptions Bill $ Upgrade process Renew Cross- Install grade Use SupportNew Services 9
  10. 10. This centralized team can also drive a betterunderstanding of Business model mix 1. How to drive growth in traditional? Business Model Mix • Optimize renewalsHigh • Targeted cross-sell and up-sell Traditional 3 1 On-Premise • Tailor pricing towards new business software Optimal 2. How to improve margins in new models? models Business Mix • Drive scale through standardizationMargin 2 • Differentiate discounting and incentives New Business • Manage cost and channel structures Models (e.g. SaaS, 3. How to optimize the business mix? Appliances) • Manage cannibalization riskLow • Align pricing and licensing Low Growth High • Create new go-to-market options 10
  11. 11. Data policy and standards then need to beenforced to allow easier reconciliation… Understand Ongoing Understand Entitlements Reconciliation Deployments • Create centralized • Implement certified Entitlement repository Software ID (SWID) Tags • Utilize master data • Enable SAM tools and standards and governance partners • Provide self-service access • Create in-product for customers and partners reporting features • Provide up-to-date • Enable usage based meters entitlement position (e.g. capacity) 11
  12. 12. …developing a modular SKU structure, andimplementing SWID tags can help Simplified SKU DNA + Certified SWID tags • Standard discovery Product • Product name • Centralized reporting • Version Offerings • Operating System • Normalized data • Tagvault.org Certified PRODUCTS are sold via USAGE RIGHTS • License meter Usage Rights • License model • Maintenance type PRICING is attached to USAGE RIGHTS • Buying Program Pricing Attributes • Volume Discount • Price-list 12
  13. 13. The final stage is to develop on-demand licensing, using Just-In-Time principles Just in time (JIT) is a production strategy "Lean," is a production practice that that strives to improve a business return on considers the expenditure of resources for investment by reducing in-process inventory any goal other than the creation of value and associated carrying costs…the for the end customer to be wasteful, and philosophy of JIT is simple: thus a target for elimination inventory is waste Entitlement Supply Chain – Future State Maximizing Deploy Activate Register in Buy based Auto- Software Trial-ware Features Product on Usage renewal ROI Dealing with Manual patch ManualLicensing License Keys and upgrades reporting process “waste” Manual Email Under / Over registration notifications deployment 13
  14. 14. A structured approach to Pricing & Licensing is neededto get in-front of the wave of new business models SaaS PaaS Appliances IaaS Just-In-TimeThe Cloud 2-Handed Licensing Clapping Virtualization Centralize Pricing MSPs & Licensing Freemium models • Increase visibility • Create modular • Eliminate process and governance SKU structure wasteSubscription • Develop policy • Implement certified • Remove manual and standards SWID tags activities Mobile devices • Control SKU • Enable true-up • Use the ProductUsage metering complexity reporting as a Channel 14
  15. 15. Thank you!Timothy_willey@symantec.com Forward-looking Statements: Any forward-looking indication of plans for products or programs is preliminary and all future release or delivery dates are tentative and are subject to change. Any future program plans, or release of a product or planned modifications to product capability, functionality, or feature are subject to ongoing evaluationSYMANTEC PROPRIETARY by Symantec, and may or may not be implemented and should not be considered firm commitments by SymantecCopyright © 2011 Symantec Corporation. All rights reserved. and should not be relied upon in making program participation or product purchasing decisions. 15

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