In order to get your SaaS licensing strategy right, there are several important elements that you cannot overlook. Entitlement management and user management tools are two essential components of a SaaS (News - Alert) licensing strategy. These will help you simplify your billing processes while tracking important data such as customer usage, feature usage trends, regional usage and more. And it is this information that will prove vital when making decisions about your SaaS licensing product packaging and development strategies.
Independent software vendors know that the cloud is here to stay. They also know that companies are adopting Software-as-a-Service applications for a variety of reasons, including: the industrialization of IT, which refers to the standardization, globalization and commoditization of IT processes; technology that is embedded in business processes, which is marked by the increasing influence that business people have on technology decisions; and technology populism, which refers to our insatiable appetite for information and the access thereof. For these reasons – and for the economic and sales opportunities that SaaS provides – cloud adoption is happening faster than ever across a very wide segment of the market.
But the differences between on-premise software applications and those in the cloud make the gathering of customer usage data both trickier and more important than ever. Monitoring and analyzing usage can help ISVs fine tune marketing strategies, enforce contract compliance and improve customer relations. But many ISVs are not used to measuring and analyzing usage data to help guide business strategies and improve software product and service offerings.
In a traditional on-premise software model, the development process for software is a linear, once-in-a-while activity. Planning leads to development, which leads to testing, and finally to the release. Later on, after implementation, there may be some fixes and support packs that lead to upgrades, but this is done on a long-term timetable. The SaaS licenging model works at a much faster pace, and end users expect changes and updates almost immediately.
This is where the usage data comes in. It can drive the development process in the SaaS model, creating a cycle where companies continuously, dynamically and rapidly invent, develop, license, supply and support their solutions. Proper measurement of usage can help ISVs build a better offering and discover new ways to do business, which will lead to better customer satisfaction and improve sales relationships. By monitoring usage, ISVs can tailor features to meet customer needs, decide which versions to support and for how long, and determine where and how much money to invest in future changes and iterations of products.
The existing model is changing and the cloud is driving that change. ISVs that do not gather, interpret and act on user data will not have the agility and flexibility necessary to compete in the SaaS space. But there are companies out there that can help ISVs develop a strategy for collecting and utilizing the usage data. One such company is SafeNet (News - Alert), which has 30 years of experience in software monetization and is an award-winning leader in the SaaS licensing space.
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Edited by Allison Boccamazzo