Recent Blog Posts

Aug 9
2011 

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

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?
Aug 2
2011 

SafeNet, Dell Boomi, and the Babel Fish

Ever since software systems have been around, people have been working to connect them together to get added benefit.  Sometimes that leads to large integrated all-in-one systems, sometimes it leads to efforts to standardise API’s and communications protocols and it almost always leads to lots of professional services.

In the cloud though, that’s changing.  One of the most innovative companies I have seen is Boomi (now Dell Boomi).   Their website does a better job of explaining their value proposition, but essentially it translates communications between systems – kind of like the Babel Fish (from HHGTTG), but for software.

Jul 27
2011 

When Does Software Monetization End for SaaS?

Great companies consider and plan for the whole user experience – the product, its price, how its purchased, updates through its life and the service and support provided.

In the days when products were purchased up front – and the monetary relationship came to a close – all the burden was on the buyer to research, plan and hope that, after parting with their money (monetization ends), the product will have met and continued to meet or exceed their expectations.  Because the customer experience often falls below this mark – and yes, sometimes with enterprise software – the dynamics of the buyer/vendor relationship are changing.

Jul 26
2011 

Manufacturing: An Industry in Transition towards Software Licensing

Part 1 of 3 from the series “Take on Licensing: What High-Tech Manufacturers Need to Know”

If you’re an equipment manufacturer in the high-tech sector, you are probably already deeply involved in the evolution from a pure hardware manufacturer to a software vendor.   Whether you are in the business of selling software-driven equipment for the automotive industry, medical imaging and diagnostics, digital printing, sophisticated surveillance systems, coin-operated gaming and casino gambling, the change to software licensing is impacting your business.

Jul 21
2011 

Mind the Gap: How CIOs and ISVs Can Have Success Together

There is a constant struggle between “lowest cost possible” and “simplicity of business model” that must be balanced between both ISV’s and CIO’s. Recently, I read a post on Computer Weekly titled “The Five Software Licensing Tricks CIO’s Hate” based on a Forrester report on unfair licensing practices.  The title suggests that ISV’s as a category are generally engaged in misleading tactics targeted at CIO’s, which runs contrary to my experiences with most ISV business models and sales strategies.  So, let’s try to look at this from a different angle as well.

Jul 12
2011 

SafeNet Simplifies the Software Licensing and Entitlement Management Integration Process – Accelerating Cloud Service Time-to-Market

SafeNet Sentinel® Cloud Services now supported by Dell Boomi AtomSphere platform for connectivity with back-office applications, including CRM, ERP, billing and marketing automation

BALTIMORE — July 12, 2011 — SafeNet, Inc., a global leader in information security, announced that Sentinel Cloud is now supported by the Dell Boomi AtomSphere cloud integration platform, enabling cloud service providers to easily connect SafeNet’s licensing and entitlement management services with their existing on-premise or cloud-based back-office systems. This capability speeds time-to-market for SaaS, PaaS, and other cloud service providers by significantly reducing the time required to integrate software licensing and entitlement management into their business processes.

Jul 11
2011 

Key Traffic Systems Penetrate New Markets by Adding Sentinel HASP SL ‘software-based’ Licensing to its Traffic Management Software

Key Traffic Systems Ltd., the UK leader in highway and traffic management software, is also a longtime SafeNet customer. With a large and growing user base, KTS needed the ability to offer hardware or software-based licensing and secure downloads of its software to accommodate changing customer needs as well as appeal to new markets.

While Sentinel HASP HL was providing them robust protection against anti-piracy, they needed to add the flexibility that HASP SL offered.  “We wanted to launch our AutoSTRIPE software into the Australian and New Zealand markets and it was not practical to enter those markets with a hard lock key,” say Chris White, software development manager at KTS.

Simultaneously, a significant portion of the company’s current UK customer base was migrating to servers without USB ports, such as virtualized servers and blade, so hardware dongles were no longer an option.

Read how Sentinel HASP SL was implemented alongside HASP HL to solve all KTS’s business challenges.

Jul 5
2011 

Can Piracy be Good for Business?

Two recent events caused me to stop and consider whether piracy could be considered good for business.

The first example involves a children’s book.  You may have heard of this particular book as it’s causing something of a stir. “Go the XXXX to Sleep” is written as a humorous book (a “Children’s book for Adults” per the author) that focuses on the difficulties some parents face when it comes to getting their children to sleep.

What’s remarkable is that it managed to grab the number 1 slot on Amazon’s bestseller list – a month before release.  However, what makes it even more remarkable is

Jun 28
2011 

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

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.