The
report, “Key Trends in Software Pricing and Licensing” shows an
increasing preference for digital licensing methods, with over half
of the 484 software industry executives surveyed explaining that
their firms wanted their licensing automatically enforced.
This represents a 6% increase on last year’s study.
The report, sponsored by the SIIA, the Centralized Electronic
Licensing User Group (CELUG) and Macrovision, was unveiled at the
SoftSummit 2005 Conference in Santa Clara, California, on
Monday.
It reveals that independent software vendors and enterprises
lack alignment on licensing policy satisfaction.
According to the study, although more than two-thirds of
software vendors have changed their pricing and/or licensing
policies during the past two years – and 57% say they are satisfied
with those policies – only 28% of enterprises say they are
satisfied with their vendors' pricing and licensing strategies.
"Many software companies today are in the midst of important
changes in their businesses," said Ken Wasch, president of the
SIIA. "The data from this study show that although software vendors
are moving forward and adapting to new market realities, they need
to embrace the new models in order to grow revenues and keep
customers happy."
The survey reveals that software vendors and enterprises are
continuing to move toward subscription-based business models. The
number of vendors offering subscription models as their primary
pricing method rose to 40% this year, an increase of 7% over the
previous year's survey. By 2007, that number is expected to reach
60%.
Similarly, the number of enterprises who prefer to purchase
software through subscriptions increased 7% to 43%, showing
increased interest from customers.
Concurrent licensing grew by 11% to 53% in the last year, while
per machine/per server licensing dropped by 7%, says the study. It
found that among independent software vendors there was a 16%
decrease in the prevalence of the per machine/server model, and it
expects metric-based licensing to reach almost 40% among vendors by
2007.
Processor-based licensing failed to take off this year, despite
some large vendors' aggressive efforts to licence per processor.
Only 6% of enterprises prefer this kind of licensing, says the
study.
In fact, the top licensing models were product activation and
network, as software vendors continue to move away from older
licensing models such as serial numbers, dongle/USB keys and audit
and compliance teams. Product activation is becoming the leading
method, with 47% using it today and 57% expected to use it by 2007,
says the report.
"As the software industry matures and vendors become more
customer-centric, we will start to see more diversity in the
product assortment and pricing offered," said Fred Amoroso, CEO of
Macrovision. "Software vendors are turning to new licence models
and automated compliance technologies to ensure that enterprise
needs are met."
