It looks like security-as-a-service is going to be one of the themes I cover here next week, and meanwhile I'm mulling a new post about SaaS and software pricing. So it seemed like a good moment to relay a comment that I heard from one of the panelists speaking back in February at the European ISV Summit in Frankfurt. Vincent Smyth, regional VP EMEA of digital protection vendor Macrovision made this rather striking assertion:
"Sharing logins is a form of piracy — it's revenue leakage."
Think about that next time you pass those scrappy post-it notes around the office so that everyone can get access to the Dun & Bradstreet credit reports, look up the Xignite currency data or share a single WebEx account. What you're doing is tantamount to criminal larceny.
Maybe this on-demand version of software piracy is one reason why Microsoft is not really sure whether it wants to go through with its rumored pilot of pay-as-you-go Office streaming. For Macromedia, though — no slouch at protecting its own intellectual property, by the way, with "over 3500 issued or pending patents and patent applications worldwide" — it's just another revenue opportunity. Smythe went on to mention several other on-demand "revenue leakage" scenarios, including drag-and-drop application provisioning in virtualized data centers or cloud-hosted application servers that access a backend database.
Another way of addressing the revenue threat of course is to embrace it head-on, as Zoli Erdos recommended earlier this week:
Yes, SaaS disrupts the traditional software market, but there’s another equally important trend happening: the commoditization of software. Commoditization is beneficial to customers, but a death-spiral to (most) vendors. Except for the few that drive commoditization.
The trouble with revenue protection is that it criminalizes would-be users in a last-ditch attempt to resist commoditization. Far better to adjust pricing to appeal to an emerging new class of users.