Software Licensing in the Cloud: Achieving Competitive Advantage

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Software Licensing in the Cloud: Achieving Competitive Advantage


“Every kid coming out of Harvard, every kid coming out of school now thinks he can be the next Mark Zuckerberg, and with these new technologies like cloud computing, he actually has a shot.” ~ Marc Andreessen, Board Member of Facebook

In a new global survey of nearly 1,500 business and technology leaders conducted by Harvard Business Review, the majority (85%), said their organisations will be using cloud based tools extensively over the next three years. They cited the ability to increase business agility, lower costs, and enable new means of growth as some of the drivers for this fairly aggressive rate of adoption.  A small group of early adopters said that they had already seen the business value and advantage of cloud technology, including faster time to market, lower cost of operations, and integrating new operations more quickly and easily.

In the past, costs, lack of technical know-how, and security were major challenges to the adoption of cloud based tools and some executives are still quite concerned about the perceived barriers and risks of cloud.  These perceived barriers mean that many businesses continue to struggle with embracing the cloud, often overlooking it as a way to cement their competitive advantage. But today’s digital enterprise is cloud-centric and if you’re not thinking about cloud software licensing then you risk becoming obsolete because your competitors will be thinking about it. According to the IDC, enterprise adoption for cloud computing has reached 70%, and 56% of organisations are looking for opportunities to implement the cloud. By re-inventing customer relationships and making data-driven and evidence-based decisions, pacesetters are growing revenue and gross profit faster than organisations not embracing the cloud.

Cloud based licensing models take away the burden of running and maintaining infrastructure, replacing it with fast access to extra capacity to quickly innovate and expand your customer reach. This speed translates to a competitive advantage, enabling you to gain new customers and launch new applications or features more easily. Your software licensing solution needs to match this flexibility and scalability.

If sustainable superior performance is to be achieved you need to offer products and services tailored to your best customers. You also need to improve operational efficiency, properly monitor and track customer usage patterns and identify new pricing models and market opportunities. All of this requires the right kind of software licensing capabilities.  

Competitive advantage is your ability to perform in one or more ways that competitors either will not or cannot match. This means becoming more customer-centric, more innovative and more efficient, which in turn produces a higher customer lifetime value. Advances in cloud licensing models have given businesses more data on their customers - meaning they can deepen their understanding of what customers need in order to remain loyal.

But more than that, cloud-computing architecture is also efficient, flexible and scalable. “The biggest impact of the cloud is the ability to accelerate the rate of innovation for businesses,” says Frank Gens, senior vice president and chief analyst at IDC and the fastest growing software companies in history are all underpinned by cloud licensing models.

The changing nature of software architecture and utilisation poses plenty of software licensing and monetization challenges. However, a new generation of cloud based licensing solutions is enabling software vendors to rise to these challenges. Cloud based licensing solutions do more than simply control access and permissions for software, they permit greater scalability and reduce operational costs. They also permit easier expansion of product portfolios by enabling software vendors to effortlessly create new product packages and push new features to both new and existing customers. Cloud based licensing solutions also provide an invaluable source of information to help companies meet their customers’ needs and keep them as customers.

The right software licensing capability can enable ISVs to improve trial conversions, predict and prevent churn and identify additional selling opportunities based on customer usage data. What’s more, greater software intelligence can drive better product decisions allowing you to deliver products that people want, at the right time, in the way they want to consume them.

The real value, therefore, lies not just in the technology itself, but in the operational changes, the cloud can enable. Greater transparency through cloud based licensing will help increase revenue by preventing non-compliance, but it will also save you up to 70% on license administration costs. Automated software licensing capabilities like activation, entitlement management and enforcement, can free up IT staff to focus on more strategic projects.

Contact us for an informal consultation or book a demo with one of our software experts to find out how easy it is to move away from traditional software licensing solutions.

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Every kid coming out of Harvard, every kid coming out of school now thinks he can be the next Mark Zuckerberg, and with these new technologies like cloud computing, he actually has a shot.

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