Consumerization: Driver #3 to Software Monetization

End customers are a much more powerful and influential entity than they used to be. Nevertheless, even though a positive end customer experience is often the main competitive differentiator in many market segments of the software industry it is still often overlooked in software licensing.

The consumerization of enterprise technologies will not go away, on the contrary according to Forbes “today’s end users are also employees of enterprises, and their expectations of the digital technologies in the enterprise are conditioned by the technology they use in their everyday lives.”

For independent software vendors (ISVs) and intelligent device vendors (IDVs), consumerization is one of the three key drivers (together with digitalization and servitization) for software monetization. Focusing on their customers’ experience involves the empowerment to deliver:

  • Self-enablement functionalities for smooth ordering processes, self-service options and intuitive customer portals.
  • Channel self-service for optimized channel selling processes, self-service options and customized, branded channel portals.
  • Software compliance for preventing unauthorized software use, delivering methods for proactive compliance and facilitating compliance enforcement.

A positive user experience is dependent among other things on versatility, flexibility and freedom of choice. Product versatility is about slicing up product functionality into separate licensable components and using feature-based licensing to either enable or disable certain application functionality. Additionally, it’s about the simplification of product and pricing structures with flexible product catalogue definitions, allowing product bundling and sales aligned to customer needs and expectations. This, in turn, leads on to license model flexibility, enabling independent license metrics for each application feature and different combinations of license terms for each deployment.

Freedom of choice grants end customers the independence and control they expect and deserve, while at the same time demands less intervention of the vendors. Today’s users are sophisticated, quick and intuitive, clearly capable of managing their product usage through dashboards and portals. This is also an ideal way to empower customers to easily enforce software compliance and finally do away with the hassle and confusion that surrounds this topic.

Carrying out these user experience measures creates happier customers, free of the traditional license enforcement handcuffs. Embracing consumerization and implementing its tactics across the software licensing arena presents a great opportunity for ISVs and IDVs to innovate, differentiate and remain viable players.

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