Software licensing must evolve, execs say

Software licensing must evolve, execs say

Software licensing practices must change to accommodate economic and technology trends, according to officials at the SoftSummit conference.

Officials from Macromedia, which uses an electronic licensing-based format for some of its applications, and Macrovision, which introduced the FlexNet e-licensing platform, both stressed that evolving software licensing schemes was critical.

"Pricing and licensing is not as sexy as [technology], but you know it's a pretty hot topic," senior vice-president of business strategy at Macromedia,Tom Hale. "Our customers are more and more diverse and having different needs. It’s a very big challenge for us to have to deal with this."

One-size-fits-all solutions are no longer the rule, Hale said.

"It's very rare that you see off-the-shelf deals anymore," he said. "Everything's customised."

Customers pick and choose what features they want to use and licensing must accommodate that, according to Hale. Vendors, meanwhile, were trying to create ongoing, predictable revenue streams and battle issues such as software piracy, he said.

Macromedia is using e-licensing, which has customers electronically entering serial numbers for access to software so they get the software they pay for, Hale said. Through e-licensing, Macromedia has been able to electronically deploy product activation, he said.

"We actually need to educate our customers so they understand the benefits of e-licensing," he said.

Macromedia was able to simplify shipping by bundling both Macintosh and Windows versions of software in the same box and have customers license which version they want electronically.

In relaying its message about licensing, Macromedia had stressed the term "casual copying" as opposed to the term, "anti-piracy", Hale said.

The company has found about 17 per cent of total activation volume was denied in the company’s anti-piracy efforts, he said.

Macromedia has activated tens of thousands of clients with its product activation plan.

"We're not seeing a huge groundswell of negative comments," Hale said.

However, there had been some tough comments, he said.

The enterprise pricing model, including long implementation times and product service arrangements, was dying, to be replaced by software as a service, Hale said. It was being outmoded by arrangements such as the ASP model, which had seen online CRM vendor make a dent in that marketplace.

Deployment of software on devices such as PDAs also requires new licensing models.

For example, a telecommunications provider might be licensing software on behalf of PDA users, Hale said.

He also rejected an industry report that said the software industry was mature, saying there was much more innovation possible.

"We're on the cusp of a huge opportunity," he said.

Macrovision, meanwhile, introduced FlexNet, which can be embedded into a software publisher's source code or "wrapped" around it, enabling the publisher to electronically generate, track and enforce licenses.

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