Enterprise Software Licensing is Just Too Complex
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When it comes right down to it, one of the reasons that more companies don't get more value out of there enterprise software is because it's too difficult to figure out how much it might actually cost to use it. No matter how you cut it, the majority of the software licensing schemes that most software vendors have implemented are designed to maximize the revenues of the vendors. If the licensing scheme, for example, is based on a processor model, than every time a customer upgrades their infrastructure, they incur a significant potential for higher software licensing fees. If the model is based on the number of named users, then customers wind up paying for 500 software licenses that may only be actively used by a handful of people at any one given time. Worse yet, there is no standard approach to licensing schemes, so a customer can wind up trying manage any number of different licensing models across any number of vendors. The end result is that they can wind up with people on staff whose whole mission in life is to keep track of all the usage of various software licenses. Given this context, a software licensing model that Aspen Technology has put forward is pretty interesting. Aspen sells enterprise software for process-oriented industries that helps manage every thing from designing a process to the supply chain required to support it. What makes the Aspen Technology approach to software licensing compelling is that it is based on a token. Each customer agrees to buy an agreed upon number of tokens that are allocated to each simultaneous user of the application. That means that if a customer buys 100 tokens, they only need to buy another token when one more user logs into the system beyond the number of tokens already licensed. Clearly, Aspen Technology could be maximizing its revenue stream using a different licensing model, but they discovered an interesting thing when they moved to the token model. It turns out that because the software license management model is so much simpler, customers have become more inclined to use more components of the company's software. As a result, more users are using more elements of the software, which Aspen Technology officials point out means they are making more money. Most customers don't really know what they are going to actually need when it comes to enterprise software. A software licensing model that allows them to interactively discover the elements of any given enterprise software without having to deal with a lot of administrative overhead is only going to encourage them to ultimately use more of the software. Vendors complain all the time that 80 percent of the customers only wind up using 20 percent of the features. The question is how much of that situation is because the software is too hard to use or is it, more likely, the vendors have discouraged people from exploring the real value of their software because it's just too hard to comprehend how to pay for it. |
