Blog Entry

Jun 13
2012 

Software Licensing in a Mobile B2B World

Software Licensing in a traditional B2B world is a mature concept, familiar to many. The idea of utilizing technology to enforce the use of a software license has evolved over many years. We have even almost managed to cement some standardised terms along the way to help define what kind of license we are talking about – seat, volume, floating, site, and so on.

Software licensing today is far more than a mechanism for securing revenue streams. It is a business enabler, with software vendors experiencing significant increases in revenue from new selling and distribution models, as well as simply recovering losses from the ‘non payers’.

When mobile software applications first gained popularity, they were very much isolated from this licensing ecosystem. But now however, we are starting to see a clear convergence between the mobile and traditional worlds and there are two factors which are influencing this trend the most:

1. Smarter Apps

Mobile applications stated life as $0.99 “widgets” – simple tools that were designed to provide basic functionality enhancements and improve the end user experience of a mobile phone. Although these apps are still by far the most dominant and popular type of mobile application, more recently mobile apps have started to become more capable and more feature rich (aka: expensive).  Today, it is becoming increasingly easy to find mobile equivalents – or even replacements – of traditional B2B software applications.

2.       App store restrictions

App stores are great if you are selling high volume, low value B2C applications. They offer everything that you would need – eCommerce services, ESD, BI, and much more, all in a nice tidy package.  But, if you have been selling traditional B2B applications for a while, the first look at the terms and restrictions defined by an app store provider may well have you running in the opposite direction.  The simple fact is that B2B vendors will never be willing to relinquish their overall governance, regardless of the platforms they wish to deploy onto.  This drives the B2B software vendor away from the app store environment, and encourages them to deploy their own infrastructures in-house to manage all of the operational aspects of the licensing.

The end result of this is that license enforcement is already starting to cross the boundary between the traditional and mobile worlds.  Everything from usage terms (time limited, feature based, node locked) to operational aspects (activation, CRM integration) are concepts which are agnostic to the platform that the application is being deployed onto. We are already seeing evidence that vendors want to be able to control all of the aspects of licensing mobile B2B applications in a manner that is almost identical to the approaches used in the traditional world. What is most interesting to me is that this evidence has been seen in B2B vendors who don’t even offer traditional application deployments today – in other words we don’t even have to consider the ‘mixed mode’ scenarios to see it.

By mixed mode, I mean the deployments where there is a mix of conventional and mobile applications being deployed together. The classic example of this is the software vendor who has recently started to offer a mobile version of a software application as an alternative to the more traditional version they have offered for years. From a software licensing perspective, they want as much commonality as possible. Everything from implementation, to activation, to upgrades, and so on should be consistent and rely on a common infrastructure.

This becomes an even bigger influence when you take the end customers viewpoint. Consider IT departments who manage corporate laptops and services. The prospect of introducing tablets into the mix is usually enough to break a sweat in all but the most experienced IT admin managers. But if these tablets also come with their own unique concept of licensing (with a nice new learning curve), then many organisations will put a stop to the party there and then.

And of course the migration from traditional to mobile deployments will always be a gradual process, guaranteeing that mixed mode will be commonplace.

These factors ensure that commonality and consistency between mobile and traditional B2B software licensing will always be important to everyone, from the software vendor to the end customer.

What do you think the impact of license enforcement will be on b2b mobile apps?