Lack of Flexible Software Licensing Costing Vendors, Finds Thales
January 12 2022 - 3:00AM
Business Wire
- 91% of independent software vendors and intelligent device
vendors (ISVs and IDVs) are losing revenue due to limited
flexibility of licensing models and entitlement management
- 90% of software vendors are concerned about their products
being compromised
- Nearly three quarters (74%) of software vendors expect an
increase in the delivery of software as a service (SaaS) via the
cloud
More than 90% of independent software vendors and intelligent
device vendors (ISVs and IDVs) are missing out on revenue because
they’re not offering the flexible licensing models customers
demand, new research from Thales has revealed. Of those vendors,
over half (54%) admit that this is due to their customers requiring
more flexible license models.
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This research comes as the software delivery and entitlement
management landscape is changing. Surveying more than 400 global
ISVs and IDVs, the 2022 Thales State of Software Monetization
Report has found that nearly three quarters (74%) of software
vendors expect an increase in the delivery of software-as-a-service
(SaaS) via the cloud, while two thirds (66%) anticipate increased
delivery of software in a hybrid manner that leverages both
on-premises and the cloud.
Vendors cited significant benefits gained from approaches like
SaaS, with improved user experience (40%) deemed the most
important, ahead of better customer value (34%) and increased
revenue opportunities (30%). However, the push towards a digital
approach also means considerable challenges for vendors when it
comes to licensing and entitling their software. In fact, a full
40% of those surveyed admit to experiencing challenges in licensing
their solutions across multiple devices, while the same number
report struggling with different deployment environments. Over a
third (37%) find it hard supporting the growing number of users who
work remotely.
Compliance and misuse costing vendors
On top of these challenges, vendors could also lose out due to
customer misuse and compromised software. ISVs and IDVs estimated
that more than a quarter of their software was unlicensed in the
last year.
Nearly all vendors surveyed (90%) say their revenue is directly
impacted by licensing agreement violations and are worried that
their software might be stolen, tampered with or copied.
It’s clear that vendors need to offer flexible licensing and
entitlement management in order to meet customers’ varying needs,”
said Jake Fox, Vice President, Software Monetization, Product
Engineering & Services at Thales. “In order to take
advantage of the increased demand for more choices in deployment,
packaging and managing entitlements, vendors must invest in new
technologies and ensure their businesses are prepared to offer
software in a variety of ways. Those who lead the way with flexible
entitlements will gain in market share, while those who do nothing
risk being left behind in an increasingly competitive
landscape.”
Data use key to improving revenue
In order to execute an effective software monetization and
licensing strategy, software vendors will need to better understand
how their software is being utilized by end-users. Doing so will
drive forward smarter innovation and improvements in products.
Fortunately, over half (54%) of vendors plan to take greater
advantage of data for business intelligence. The data points that
vendors are relying on, focus heavily on feature usage, and include
the features users search for most (43%), , least popular
features(41%) and the features used most and least often (41%).
Fox continued. “Data should be an essential part of any
successful business, but it must be used properly. Data can lay the
groundwork for future product development, ensuring the business is
investing in the areas that customers are using. On top of that, it
can also underpin software growth strategies by enabling businesses
to tweak entitlements, agreements and packaging in real-time to
suit customer needs, in turn securing maximum return on their
investments.”
About Thales
Thales (Euronext Paris: HO) is a global leader in advanced
technologies, investing in digital and “deep tech” innovations –
connectivity, big data, artificial intelligence, cybersecurity and
quantum computing – to build a confident future crucial for the
development of our societies. The Group provides its customers –
businesses, organisations and governments – in the defense,
aeronautics, space, transport, and digital identity and security
domains with solutions, services and products that help them fulfil
their critical role, consideration for the individual being the
driving force behind all decisions.
Thales has 81,000 employees in 68 countries. In 2020 the Group
generated sales of €17 billion.
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PRESS CONTACT
Thales, Media Relations Security Vanessa Viala +33 (0)4
42 36 58 63 vanessa.viala@thalesgroup.com
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