Software licensing models flawed: Flexera

There appears to be a discord between software vendors and their enterprise customers when it comes to licensing. While vendors are patting themselves on the back for bringing out new software licensing models that keep up with changing technology, enterprises believe that those new models do little to meet their business needs, according to Flexera vice-president for Asia-Pacific, Tom Canning.

In recent years, virtualisation, cloud computing, and bring-your-own-device (BYOD) trends have changed the way that software is deployed on back-end IT and end-user devices. Established vendors have attempted to meet these changes by bringing in different licensing structures. Microsoft, for example, has models where server software can be charged per virtual machine or per CPU within a physical server. Adobe is now heavily pushing customers onto its subscription-based Creative Cloud suite.

BYOD is complicating licensing as well, with employees bringing in their personal devices for work purposes.

"Vendors are trying to match licensing with technology changes," Canning told ZDNet. "You look at virtualisation; so they're going to sell not on a per-server basis but on a power-of-the-server basis, because the more powerful the server, the more virtual sessions you can run.

"They're acknowledging the technical challenges, but they don't really understand how the customers really want to buy."

He said enterprises want flexibility when consuming software, and the ultimate licensing model for that is a usage-based model; you pay for what you use. The problem is with that flexibility comes lack of predictability on cost, according to Canning.

"The other option is to always buy twice as much software just in case, but that's not optimising your spending, because you're always going to have extra licences and that's not a smart strategy either," he said. "It's getting the right level of spending with the right level of flexibility and predictability that is difficult.

"Enterprises are struggling with picking through all these new models."

Ideally, companies want to pick and choose different aspects of various software licensing models, Canning said.

For the big software vendors, Canning can't pinpoint a company that is getting it totally right with enterprise customers, but did highlight that some of them are working hard to meet customer demands.

"It's always going to be hard for a big vendor with multiple products, different offerings, and different licensing models," he said.

Flexera senior vice-president of marketing, Randy Littleson, also sympathised with large vendors trying to adapt their software licensing structures to keep pace with changing expectations.

"The bigger the company, the more geography and market segments they are involved in," he told ZDNet. "All of them have unique needs, and all of a sudden you have to try to satisfy them all — it becomes very complex.

"The intention is there, but the reality is that it's really hard to create a model that covers all scenarios in a simple way."