Blog Entry

Jun 14
2011 

Entitlements vs. Licenses: Setting the Record Straight

“What’s an Entitlement?

In recent meetings with leading technology firms, this very question has surfaced several times.  It’s both interesting and intriguing to watch the interplay of definitional debate amongst functional users with vastly different hopes of what “entitlement” could mean.

Perhaps the most universal insight was this

The practical application for how one can use entitlements to enable business processes and new customer experiences was often the most overlooked aspect of the debate. 

Typically support organizations want to understand who has paid and has the right to receive support.  Sales teams want to validate that: a) their customers are using only what they have paid for, and b) that they know the appropriate candidate pools for future upgrades.  Operations organizations want to minimize fulfillment overhead and track to specific metrics that accurately depict performance excellence.  And the IT organization, well, they are usually yearning for the simplest, most cost-effective solution that allows the business to function.

And while these business objectives are being hashed out in the internal debate, the vehicle to achieve them remains relatively misunderstood, especially in an age when debt-conscious politicians continually discuss the need to address “social entitlements” which are of a completely different nature.

Licensing:

At the core, the term “license” refers to the terms and conditions of use of a product or service.  Licenses are the caveats and the boundaries attached to the use of a specific good or service.

Entitlements:

Entitlements, on the other hand, represent the “right of use” for an individual or organization.  This right to use can consist of multiple services or products, and has virtually no limitation in terms of scope (time, usage, breadth, depth).  But the central consolidation and management of entitlements is the glue that enables an organization to holistically start to focus on the customer experience.

The “right to use” is uniquely customer defined.  It can serve as a catalyst for organizations to consider how they want their customers to interact with them, how their customers may want to consume the products and services they offer, and how as a vendor in the ecosystem, they can come to understand, document, and execute strategies in the fulfillment of that customer centricity goal.  It is easy to understand how this “big picture” can get lost in the maelstrom of day-to-day tactical survival of fast paced environments.

But more importantly, in your organization, what does “entitlement” mean?  Is it universally understood and agreed upon as a term?