Are you one of those ISV’s who think that you only need protection against software piracy or reverse engineering with no need for any kind of licensing? You are not alone – this is the common belief of most Independent Software Vendors. ISV’s believe that since they are selling their products through perpetual pricing models, their software protection and licensing needs are very simple and software protection is all they need.
Usually the above approach is works if the product doesn’t require any future upgrades. If you are selling into the B2B market however, you are expected to maintain an increased level of support for your product. Customers have the expectation that ISV’s not only support their products for various operating systems and for any bugs, but also provide new product features and updates.
And this means:
1. At the bare minimum, you are selling annual maintenance to your existing customer base that allows your customers to have access to product support in the wake of any issue faced in the current version.
- How do you manage whether a particular customer asking for support is entitled for it or not? Consider whether this requires your team to manually search for various records before their support entitlement can be established.
- Will having a self-service portal that allows the customer to access the latest updates cut down your support costs?
- Do you have an easy way to get a list of customers who haven’t renewed their maintenance plan? Having a list of such customers or those with expiring contracts could be highly valuable for your sales team.
2. You periodically offer new releases of your product that may have new features.
- What is your software pricing strategy for new versions of your products – do you give those to your existing customers free of cost? Defining your software pricing strategy for both new and existing customers is important to your bottom line as well as your customer retention strategy.
- Do you have an easy way to get a list of customers who haven’t upgraded to the new version of your software?
3. As your product evolves in terms of features, situations may occur where your
product is catering to new market segments (students, SOHO users, enterprise
users, etc.). This evolution may lead to a change in software pricing strategy as well.
It is inevitable that ISVs will struggle with maintaining their revenue model if it is dependent upon perpetual licensing without any mechanism to manage the annual maintenance, upgrades, and features. No matter what revenue model you are currently using, you still need to think beyond software protection to software licensing and entitlement management concerns, allowing you to be a more agile ISV.