Blog Entry

Jun 29
2010 

Software Licensing Success: Adjusting the Aperture

Story time. Some time ago I worked with a software company who was mostly convinced switching software licensing technologies would be in their best interest. One problem though: their hesitation was not around cost (financial investment, development effort, support impact, external and internal impact) but instead revolved around the thought of to giving their customers “double entitlements”. The concern was that each customer would already hold a set of license keys that would run the current and prior versions of the software and would *then* be given an additional full set of keys for the new version sitting on new technology, thereby doubling the number of software licenses their customers could potentially run. Sidebar: switching licensing technologies does not automatically result in double entitlements.

The licensing team asked me to start to get my head around how they could add smart logic to their licensing code to better control use across versions. My kneejerk reaction was to begin conceptualizing the design. Then I came to my senses and pushed back a bit by asking who was the primary person/team who had strong feelings about the double entitlements. The objection turned out to be from the VP of Product Development.

“Understood, but what does your head of Sales think about it?”  Silence. Hmmm.

The tide changed after a single half hour call with the company’s head of sales… and ended up saving the VP of Development hundreds of hours of development time.  The Sales VP believed that the customer base was largely made up of honest businesses who value license compliance and generally try  to do the right thing. He also felt the sales teams were close enough with their accounts so they would likely know if their customers were blatantly abusing their software license agreements.  The VP was also clear that he wanted the licensing to be a tool that prevented his customers from unknowingly getting themselves out of compliance rather than act as an anti-piracy mechanism.  The company ended up rolling out the new technology without having to make a large development effort to engineer complex migration logic into their licensing code. Smart messaging and solid customer communications relieved the entitlement duplication concern.

Here’s the point for all you software licensing project owners: leverage your Sales VPs.  They know the customers and are ultimately responsible for meeting the overall quarterly revenue targets.  Your sales leaders can help you shape your corporate licensing philosophies and guiding principles… and can also make your lives a whole lot easier.  In this case, involving the Sales VP at the license policy level changed the company’s licensing implementation, saved his company software engineering work and provided a foundation on which they could make future licensing decisions. All that with one painless phone call.

Most license enforcement systems are put in place to protect revenue. Your head of Sales owns the revenue number. Marry to the two by letting your Sales executive control how tightly you twist your enforcement aperture.

This topic fits neatly into the material I talked about in the recent webinar “7 Traits of Licensing Champions”. I encourage you to view the replay and contact me directly with any questions.

  • http://www.thestoragealchemist.com Steve

    So, is it your premise that Sales should run product management and make product decisions? At some point I think the VP of PM should have been able to say – so what “IF” there is ‘double entitlements’? How long would that last? A couple of revs?