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David DiMillo

David DiMillo

Principal Consultant, Software Licensing Professional Services - SafeNet

Dave joined SafeNet in March 2010 where he now leads the company’s team of Software Licensing Consultants world-wide. As SafeNet’s Principal Consultant, Dave is responsible for guiding enterprise-level software vendors through the daunting challenge of fully integrating license enforcement into their businesses. Dave specializes in top-down methodologies that include helping vendors define their corporate licensing goals and philosophies, designing system architectures, as well as developing business process and technology requirements that serve the myriad of needs across organizations.

Dave has an unparalleled amount of experience designing, launching, and managing some of the industry’s most complex licensing systems that manage millions of installed software seats including software development tools and CAD/CAM solutions. Prior to joining SafeNet, Dave spent the previous 11 years leading the licensing strategy and implementation for the Rational software division of IBM.

Dave graduated with honors from the University of Maine with a degree in Mechanical Engineering.

11 Posts

Mar 28
2012 

Do software vendors intentionally allow ways to bypass their enforcement mechanism?

by David DiMillo

This is a juicy question was posed on Quora (http://b.qr.ae/HmF392). I was intrigued by a couple of the responses and added my own.  Here is my view…

The answer is yes but mostly no. Confused?

Here’s how it usually works…

First, software vendors separate compliance strategy from piracy prevention because they are inherently different beasts. This can be done by placing their customers along a compliance continuum.  On the left you have customers who go to lengths to be compliant and will gladly pay for software they use regardless of whether the software has license enforcement or not. On the right you have users who intentionally use pirated software and wouldn’t pay for it if they couldn’t steal it. The vendor’s focus is clearly on the left end of the scale since this offers the largest revenue opportunity.  The right is often nothing more than noise.

When vendors introduce license enforcement, the most common philosophy (by far) is to consider the enforcement a tool that will help keep their honest customers doing the right thing and to facilitate creative licensing models. All software license enforcement tools have some level of vulnerability. However, the software market usually considers the higher-end commercial enforcement products more than adequate to cover ~90%+ of their continuum, working from left to right.

That 10% is essentially the topic of the original question posed in this post. The software vendor asks itself if it really cares about investing additional time and resources making the enforcement more air-tight to further prevent piracy by users who would never pay them.

All said, there is always a point of diminishing return and vendors choose to not care a whole lot about usage where they’d never see any revenue.

I agree with the premise that many companies would rather see users stealing their software than paying a competitor. However, applying the notion of the compliance continuum, the real money is typically on the left end of the scale with companies that wouldn’t use pirated software in the first place so the revenue in question is likely a fudge factor at best.

What do you think?

Feb 20
2012 

Building Your License Enforcement Business Case, Part 2

by David DiMillo

My last blog discussed building a business case for implementing a software license enforcement system.  A key component of the case should be a plan to minimize negative impact on the customer base. This article offers a handful of practices designed to help you ease your customer roll-out.  While not every practice can apply to all cases and to all business, each should provide some food for thought.

Sep 13
2011 

No Version? No Problem.

by David DiMillo

Does the following story sound familiar?

“Hello, it’s Steve in Product Management.”

“Hi Steve, it’s Ian in Sales.  I’m looking at the price book and there’s a different license part number for every version of the product. I see dozens of them.  My customer wants to use various versions of the product across teams.  Can I just put the latest version on the quote and tell them they can use the licenses with older versions too?”

“I’m not sure. You will have to ask Legal.”

“I need to get this quote out now. Why is it like this?”

“I’m not sure about that either. You’ll have to ask Operations.”

Including product versions as attributes of your license part numbers may seem like the obvious right thing to do.  In many cases it works perfectly well. But before going down that path, you should think through a few factors.

Aug 9
2011 

Show Me the Money! Revenue Recognition Best Practices (Part 2)

by David DiMillo

In my last blog entry (Show Me The Money, Part 1) we looked at a number of factors that play into software revenue recognition when a vendor (ISV) introduces electronic license enforcement into their product lines.  Part 1 focused on the principles and mechanics behind giving customers access to the software upon order execution so that the ISV may recognize revenue.   Part 1 concluded by bringing another key element into the revenue recognition equation: time.  Time can affect revenue recognition in a number of ways:

  • We have the time required by the customer to actually get their license keys after the ISVs claims to have given them “access” to the software.
  • We have the software’s ability to run by default without a license key for a temporary amount of time.  Does that count as “access”?
  • We have some ISVs selling perpetual entitlements but wanting or needing to deliver license keys that expire annually.  Does the customer really have access to what they bought?
Jun 28
2011 

Show Me the Money! Revenue Recognition Best Practices (Part 1 of 2)

by David DiMillo

I bet that made your ears perk up a bit, didn’t it?

Your CFO probably has the same type of reaction when the topic of revenue recognition rears its head. After all, it is one of the most critical elements in your business’ machinery.

Customers frequently ask me about the impact license enforcement and license key delivery can have on a company’s ability to recognize revenue.  This indeed can be a touchy subject, so I should start by making a few foundational statements.

I will not suggest how your company should manage revenue recognition nor do I intend claim the revenue recognition practices are acceptable or VSOE compliant.  Your company’s finance team should be the ultimate authority as to what is acceptable for your business.   I encourage any business considering license enforcement to ensure your CFO is will deeply engaged in your license delivery processes.

I will, however, discuss a number of revenue recognition techniques and best practices that I have seen used by multiple successful companies with revenues over a half billion per year. 

Jun 6
2011 

Customer Intimacy Will Drive Old School Licensing to the Cloud

by David DiMillo

“It works, but it is old school”. That is how I’ve heard many business leaders describe their longstanding licensing implementations lately.   So what is next for this space?  As a long time software licensing business and implementation consultant I have the opportunity work with some of the industry’s leading minds in this area and can confidently say that I have seen the future of software license enforcement and it revolves around, you guessed it, the cloud.

Nov 8
2010 

Eliminating the ‘Gotcha Aspect’ of Software Licensing

by David DiMillo

Licensing is a unique experience for every organization, with distinctive business goals and custom business process. More often than not, the challenge to making licensing work is far from a technical problem; it is a business integration or project management problem. To be successful, software publishers need to adopt a top down approach: defining their software licensing vision and then fine-tuning their license enforcement and management processes and technologies. Consensus must be built, processes must be defined and technology must be aligned with these objectives. This is where I come in.  With over 18 years of experience building, managing, and evolving some of the world’s most complex licensing ecosystems the least I can do is share some of what I have learned!

Aug 12
2010 

Splitting Hairs or Just Good Discipline?

by David DiMillo

I don’t have many pet peeves in life. Okay, my kids will tell you I’m the typical dad who gets irritated when they leave the lights on in their rooms and monkey with the thermostat. But besides that, I roll with things pretty well.

Then comes perhaps my only work-related peeve: the misuse of the term “license”. I am sure it stems from my IBM days where teams of gifted lawyers spend oodles of cycles slicing, dicing, chopping and julienning seemingly simple concepts and produce software license agreements of Tolstoyian proportions.

Jun 29
2010 

Software Licensing Success: Adjusting the Aperture

by David DiMillo

Story time. Some time ago I worked with a software company who was mostly convinced switching software licensing technologies would be in their best interest. One problem though: their hesitation was not around cost (financial investment, development effort, support impact, external and internal impact) but instead revolved around the thought of to giving their customers “double entitlements”. The concern was that each customer would already hold a set of license keys that would run the current and prior versions of the software and would *then* be given an additional full set of keys for the new version sitting on new technology, thereby doubling the number of software licenses their customers could potentially run. Sidebar: switching licensing technologies does not automatically result in double entitlements.