Blog Entry

Mar 28
2010 

Perfect Harmony

Some high profile software companies are insanely profitable. Most software companies, though, have a tougher time – offering more niche products and (relatively) high prices in specialized fields and with limited resources. In these cases, software licensing is at the heart of the relationship between their company and their customer.For these companies, software licensing defines every dimension of every interaction:

  • which software and features can be used and by how many people,
  • what type of support and services are provided,
  • how the sales engagement happens,
  • the financial side of the equation, and
  • the ultimate satisfaction of both parties.

It is remarkable how little thought or planning goes in to the software license, and how often it becomes a source of tension in the relationship. I spoke to a software publisher this week who told me of a customer that had not migrated an application to a newer hardware platform because the CPU power of the newer platform would have meant an instant quadrupling of the subscription price. Instead, the customer was spending a (growing) fortune to maintain the old hardware.

Like in a marriage, the relationship between vendor and customer needs to adapt and change over time. In the software business,technology changes rapidly but license agreements don’t. Just like wedding vows, the license agreement should spell out how each side will honor the other. Most license agreements, however, are more like pre-nuptials, originating from a position of mistrust.

Last month, we hired a Marriage Counselor (Professional Licensing Consultant). We have had lots of implementation services in our portfolio for a long time.  Our new Marriage Counselor Professional Licensing Consultant is focused on getting our customers to understand and define the relationships they want – and then helping to make them operational, so they live happily ever after.