Revulytics Blog

V.i. Labs' CEO on IDC Software Pricing and Licensing Predictions for 2014

March 19, 2014

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IDC Research Vice President Amy Konary recently delivered a presentation on Worldwide Software Pricing and Licensing Predictions for 2014. One prediction rang especially true for us at V.i. Labs: “Seeking to increase revenue, software vendors will initiate twice as many audit requests in 2014 as in 2013.” Konary noted that, “vendors will develop automated systems for identifying audit targets, and will audit more frequently” and that for IT organizations, “demands on time and resources for software audits will increase.”

IDC’s guidance for IT included:

  • Taking steps to self-audit in advance of an audit
  • Addressing the underlying situation that caused or enabled the issue when an audit does occur

My Thoughts

We work with more than 75 software vendors to generate new revenue from the use of unpaid software, so I wanted to share some thoughts on this prediction. First, it is important to note that automating systems can include a wide range of options including mining customer data, leveraging CRM systems to develop profiles of non-compliant customers, and deploying software usage intelligence like our CodeArmor Intelligence.

V.i. Labs sponsored the International Business Software Managers Association’s Compliance Manager Summit last week in Santa Clara (an event for software company license compliance managers and staff). Many of the speakers talked about the goal of moving away from a “compliance cop/audit” model to a “consultative license management” model. Compliance teams are becoming much more attuned to the role they can play improving the relationship between sales and customers by making it easier for everyone to understand what applications are deployed within an organization – phrases like “transparency” and “frictionless” rang throughout the sessions (Amy Konary jokingly noted that attendees should note these words if they were playing “buzzword bingo”).

When our customers implement software usage intelligence they are effectively automating the audit process by identifying both overuse and misuse (piracy) of their applications. Armed with this data, they can:

  • More accurately target the accounts (and prospective accounts) that require attention from the compliance or sales team – eliminating the “fishing expeditions” that enterprise license managers dread
  • Minimize the time and resources required for audits. To be clear: while vendors don’t view these activities as an audit, most customers view any request/discussion about deployment numbers as an audit. Automating the collection of software usage data establishes a baseline for these discussions.
  • Help customers prevent overuse or misuse in the future by analyzing the software usage data to identify when overuse occurred and which machines were the first to be using pirated software. The ability to identify and communicate issues before they become problems is a great way to demonstrate value (and transparency) to customers.

If the goal of compliance teams is to become more consultative and transparent (and to minimize friction), those teams leveraging software usage intelligence are in a better position to do so. It is a win-win situation: the vendor generates revenue on the software actually being used by a customer, and the customer has a more accurate view of its usage without dedicating time and resources to a traditional audit.

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Joseph Noonan

Post written by Joseph Noonan

President and CEO at Revulytics

With more than 25 years of experience in the software industry, Joe founded Revulytics in 2006, bringing a wealth of expertise in guiding software companies to success.