Blog Entry

Jul 26
2010 

Software Licensing & Entitlement Management for Product Managers

Often when talking to customers I find the conversation of licensing focused solely on ensuring compliance – that is to say, making sure that their customers don’t run afoul of their license agreement. That’s like buying a Ferrari and never getting out of 1st gear.  Business intelligence is one of many over looked major benefits of a properly configured licensing and entitlement management system. Most would agree that reports from ERP systems are generally not flexible enough nor tailored enough to give Product Managers the information necessary to make intelligent decisions around the future of their product roadmap and packaging strategies. To fully realize the potential of your licensing system it is important to remember the business benefits of tracking the customer use of the license. At a basic level, as a product manager, I want a licensing system to provide me the necessary information to make these decisions:

1.) Prioritization of my user stories to maximize customer satisfaction on my R&D investment
That is a fancy way of simply saying I want to know what features I should be investing in and equally as important, knowing what features I shouldn’t be investing in. We all manage a user story list greater than the development resources we can allocate to it. Getting the important features prioritized for customers will optimize the value delivered to my customer base for each release.

2.) Which features of my product to monetize separately
Having an understanding of the various ways that my customers use my products lends itself to be able to make smarter packaging decisions. Determining which features to package into a baseline product and which features can be sold as added value allows me to more appropriately reach customers who want a low investment in the software all the way up to the larger deployments that want full access at a much grander scale.

3.) Proactively manage frustrated customers who feel like they have purchased shelfware
End users who are having deployment issues will have a low percentage of deployed seats: Deployed Seats / Total Available Seats, where deployed seats = number of standalone seats or # of used concurrent seats.  Reaching out to those customers proactively to understand where their deployment hurdles lay allows you to better make good on the promise of acting as a technology partner instead of as just a software vendor.

Knowing how your business will improve (by better knowing your customer) is a major advantage that should not be overlooked when choosing the right licensing technology.