Software monetization is a fairly new term which broadly applies to software licensing, software protection, and entitlement management. It can be viewed as the generation of revenue from an organization’s intellectual property – which in this case is its software. Software constitutes a significant part of a software company or device vendor’s intellectual property (IP) and, as such, it requires strong security and protection.
Software piracy is a problem that costs the global software industry more than $100 billion annually and it is in the best interests of software companies and device vendors to take the necessary measures to protect their code. However, software protection alone is not enough to pay staff, keep the lights and expand and evolve into a global software business. On the flip side – all of the creative pricing and packing in the world won’t get you anywhere if you have no way to ensure payment for products or services and protect your intellectual property from theft or manipulation.
Effective software monetization enables software companies and device vendors to simultaneously protect their applications from unauthorized copying, distribution, and usage, while at the same time capturing new revenue, which enables the business to grow and evolve. Modern software monetization solutions also combine license enforcement and enablement with visibility into how and when applications are deployed and used. These data insights can help drive business strategy.
Depending on a company’s particular use case, they can choose to implement a hardware, software, or cloud-based licensing solution in order to monetize their software. Cloud-based licensing eliminates the need to ship physical products and provides automatic and immediate license enablement, so users can access software from any device, including virtual machines and mobile devices, quickly and with minimal fuss. No matter what type of software application has been developed or how that application is being delivered to the end-user, ultimately software monetization needs to be a mechanism that maximizes the profitability of a software.
Software monetization enables software companies and vendors to drive revenue from software products while also protecting IP. But the demands of enterprise and end users are constantly evolving and deciding how to package and price products can be mind-boggling. A lot of revenue can be lost when business decisions are implemented without proper due diligence. Software companies and device vendors must be able to adapt their pricing and packaging strategies and if necessary separate an application’s features to reach new market segments. Today’s marketplace is flexible so many software companies and device vendors are increasingly turning to flexible licensing solutions in order to optimize investment in the product roadmap and drive future business.
Whatever industry a software company happens to be in, it requires a comprehensive software monetization program to future-proof its business and gain a competitive advantage. The software monetization landscape is changing with speed and older licensing and pricing models have been trending down for years and subscriptions and consumption-based business models are now key. In order to be successful, software vendors need to be able to transform their strategies when necessary and be able to deal with the complexities of this new age, all whilst optimizing the amount of money they make while doing it.