Blog Entry

Aug 25
2011 

Software Licensing Strategy? You’d Better Make One. Yes, You.

It seems that almost every small company dreams of becoming a larger one, with the self evident corollary that with size comes resources, and with resources, mountains become molehills.

The truth of that statement may be laughable to many employees of larger companies, but it is still surprising to me how many small and mid-sized firms delay success planning until after they have “arrived”.  But more often than not, what often starts out as a simple, single offering gradually expands into multiple offerings to multiple markets.  Acquisitions get considered, and some even occur.  And before you know it, your little fledgling enterprise has gone from a garage to having a marketing department that couldn’t fit in the same garage.

Along the way, inevitably your needs change.  What used to be a quest for survival evolves into a need for efficiency and manageability.   Getting control of the multi-headed hydra takes more and more effort.  At some point, perhaps you decide that you need to graduate from Excel to some more sophisticated billing system.  These days, its likely that you would consider a cloud based billing system or ERP tool as an option.  Your sales leader may pipe up at some point and extol the virtues of a CRM system, which in all likelihood will also be cloud-based.  The pace of life accelerates, and your expanded team is busier than ever, trying to keep up with the demands of the markets you serve.

And with all of the priorities you have just running  your business, why should licensing and entitlements really be a priority?  Who should own it?  Is it sales?  Operations?  IT?  Who really gains the most from a unified licensing strategy and execution plan, and how do you make that tangible?

My argument would be that the ultimate beneficiary is the customer.  The customer experience becomes one where they can:

  • License software as they want and expect to use it (multiple license models,   automated entitlement capabilities)
  • Align their cash flows with their preferred business model
  • Receive access to their software in a more timely fashion (enhanced operational efficiency enabling better turnaround)
  • Timely access to the appropriate level of support automatically when needed (through adequate entitlement management)

And who within the organization should be representing the customer?  Each organization is different, but typically organizations that have a senior executive with ultimate responsibility for a business (either a division or an entire company) have more success marshalling the resources necessary to ensure success in software licensing model strategy implementation.

All of the business functions will be required to participate for success to be achievable.  But ownership of the process starts with commitment to the vision, and usually vision is not contained in any single function but across them all.  A licensing strategy supports a larger vision, and needs to be part of that process.