7steps software-licensing

© SafeNet Confidential and Proprietary

Darim Rahmatallah – Product Management, SafeNet

Bastiaan Van Dorsten – Pre Sales Consultant, SafeNet

David DiMillo – Principal Consultant, SafeNet

Have a [email protected]

Learn more:www.safenet-inc.com/Sentinel

7 Steps to the

Software Licensing (R)evolution

How to Boost Software Profits With New Licensing &

Entitlement Best Practices

mailto:[email protected]

2


Who is SafeNet?

SRM Expertise Leader in anti-piracy, IP protection, enterprise licensing, entitlement management and SaaS application management solutions (Sentinel)

Global 25,000 customers in 100 countries

Employees 1,600 in 25 countries

Revenue ~$450 million

Position 4th largest global security company

Founded 1983

3


“where do we begin??”

“this is more work than we

thought it would be”

“We need more control over

customer usage” Lots of information in

small buckets

“who is going to own

this? Not it!”

Result – a bit unorganized and unsure where to start

What Are Some Teams Saying?

4


Process vs. Technology

Our clients often think they have a technical problem That's how they find us! Its usually more of a process problem A focus on technology alone ends up in a bad place

5


Your licensing project leader will deal with every element of the lifecycle

Licensing Project Lifecycle1. Corporate Licensing Strategy, Priorities and Vision

2. Licensing Philosophies and Policies

3. License Model Development

4. Licensing Requirement Specification Development

5. Licensing Use Case Identification

6. Licensing Technology / Vendor selection

7. Licensing Architecture Definition and Roadmap

8. Licensing Workflows and Customer Experience

9. Licensing Engineering Plan

10. Licensing Development & Implementation

11. Internal Preparation, Communication and Enablement

12. External Licensing Program Roll Out

13. Licensing Program Management and Optimization

6


1. Corporate Licensing Strategy, Priorities and Vision

2. Licensing Philosophies and Policies

3. License Model Development

4. Licensing Requirement Specification Development

5. Licensing Use Case Identification

6. Licensing Technology / Vendor selection

7. Licensing Architecture Definition and Roadmap

8. Licensing Workflows and Customer Experience

9. Licensing Engineering Plan

10. Licensing Development & Implementation

11. Internal Preparation, Communication and Enablement

12. External Licensing Program Roll Out

13. Licensing Program Management and Optimization

Business Process

Integration

Business Integration

“You likely have as many business process challenges as technical issues”

“Technology alone is not going to solve your problem”

Technology Integration

Gravity

7


Why is software licensing a gray area for some businesses?

IT

Sales

License Enforcement

License Back Office

8


Why is software licensing a gray area for some businesses?

IT

Sales

License Enforcement

License Back Office

9


What are these teams really missing?

10


The Vision

“how is it all going

to work?”

“how do all the pieces fit together?”

“what things do WE

have to do?”

“what things can we outsource?”

11


Planning Workshops

Sales Models

Begin by starting at the top How are we selling?

How do we want to sell?

What if you had more control over product behavior?

Operations

Fulfillment and Delivery Mechanics What happens when our sales teams place an order?

What do we want to happen?

How do we want to deliver?

Talk about your customer experience

Enforcement

Licensing Requirements Where do we add controls?

How do we feel about security vs. piracy?

Technology investigation

12


Building the Vision

Ah… land ho! I can see it!

13


Software Activation - Critical Components

CACLM

Mfg

ToolsFulfillment

IOS Infra

BU PM

Initial Requirements & Platform dependent work

Enabling platform Independent technology & 3rd Party engagement

Cisco Product License Registration Portal

Portals for various licensing workflows

Network-wide License Management Tool

Customer support and and troubleshooting

Cisco.com tools e.g. Feature Navigator

License generator, Install licenses on new devices

Size and Scoping requirements and dependencies, prioritization and Consistency

14


Workshop Outcomes

On process vs. technology…

“When you started with all the process discussions yesterday, I really wondered where it all was going. But now I realize they were exactly the conversations we needed to have”

- US Software Vendor

“If we are only focus on the technology, we will fail. We have to have a broader view and look at all the processes surrounding the technology”

- EMEA Software Vendor

15


Workshop Outcomes

UK CompanyIdentified 4 new ways to

sell through the workshop

EMEA CompanyIdentified a customer

compliance problem during the workshop they didn't know

they had

US CompanyCame to the workshop with

little idea of how things would work. Had their vision in hand

2 days later.

16


Case Study

Vision and business process evolution in practice Streamlined processes Consolidation

Let’s look at how one company dealt with this problem…

17


Original State Licensing Landscape

• 120 software products

• ~$500M in annual revenues for product protected with license enforcement

• 3 unique licensing technologies

• 3 unique customer experiences for license key fulfillment

License key generation• 50% of all keys generated manually using 13 full time headcount worldwide

• Automated tool used for the remaining 50%

Pain Points• Manual license key generation was expensive and slow

• Supporting separate customer experiences was confusing and not optimal

Item Annual Cost

License key generation tools $325K per year

License key generation & support staff $1.31M per year

Total cost $1.63M per year

80% of the

total cost

was in headcount!

Manual process = $$

$

18


Getting Efficient, Y2 Major changes

• Moved all license key generation to a single, scalable platform with a customer self-service web portal

• Consolidated user workflows to a single experience

• Reduced licensing support staff by 5 headcount

Licensing Landscape• Consolidated to 2 licensing technologies

• Single customer experience for license key fulfillment

• Single sales rep experience for issuing evaluation keys

Item Cost

License key generation tool $220K one time startup cost$500K per year maintenance

License key generation & support staff $820K per year

Total cost $1.54M Y1 cost$1.32M starting Y2

ResultAdditional spend of $165K in tooling enabled $500K/yr cost reduction in headcount plus delivered a single and much more feature-rich customer experience Reduc

ed headcount

cost by 38%

With a much

better user

experience!

19


Scalability pays off big, Y4

Major changes• ISV completed 4 incremental acquisitions

• Added 100+ incremental products

Licensing Landscape• Each acquired company had their own license key systems with a total of 14 headcount manually generating keys

Incremental Cost

License key generation tool $200K one time for enhancements$200K per year incremental

License key generation & support staff (potential) $1.47M per year

License key generation & support staff (actual) $255K

Total incremental cost $625K in Y1$425K starting Y2

ResultThe ISV moved all 4 license managers of the acquired companies to their corporate standard at minimal cost

Do we need to add 14 more people?

No!Zero.

20


Cost comparison

The “do nothing” trajectory

Had the company maintained multiple licensing systems and manual key generation:

Item Y1 Y2 Y4

Unique customer fulfillment experiences 3 3 7

Licensing support headcount 13 13 27

Annual licensing support cost $1.63M $1.63M $3.1M

Item Y1 Y2 Y4

Unique customer fulfillment experiences 3 1 1

Licensing support headcount 13 8 8

Annual licensing support cost $1.63M $820K $1.1M

Actual!

Potential run

rate

Actual performanceScalable customer-self service license key fulfillment system:

21


What’s the Lesson?

By introducing a self-service entitlement and

customer fulfillment portal, the ISV:

Reduced licensing support costby 38% in the first year and by 66% including acquisitions

Delivered a single customer experiencefor their entire product portfolio

Developed a scalable corporate standardfor license key delivery

Absorbed multiple acquisitionsat reasonable incremental cost

22


Sales & Marketing: Track entitlements and activations

End User: Single self-service license management portal

Centralized License & Entitlement Management

Product Management: collect and analyze product entitlement and activation data

Customer Service: Can assist customers with entitlement lookup and activation

Operations: Single tool for defining licensing models and license definitions

IT: One license backoffice system to manage that can support multiple licensing technologies

23


Sentinel™ EMS in Action

ISV User (YOU)

ISV App

Service Tier Nodes

Authentication Server

Load Balancer

SCC

API Runtime

Partners

Internal

Support Sales Prod Mgt

Define

Entitle

Control

Report

24


Why licensing implementations fail

Improper focus “Well, this is a development and IT project, right?”

“Engineering our products to use keys solves our problem, right?”

“Our IT guys can easily build a system to deliver keys, right?”

Lack of Ownership and Expertise Many stakeholders across the company but no real owner

Leadership by committee isn’t a formula for success

Not considering all the stakeholders and use cases can lead to inadequate designs

Not prepared for impact Customer licensing (system down) issues escalate through sales and support

quickly

Inadequate business processes lead to confusion and frustration

Poor licensing designs can be slow and expensive to correct after going live

25


7 Habits of Successful Licensing Implementers

They …1. Have a clear internal owner

2. Have well-defined licensing philosophy and policies

3. Focus on the use cases

4. Focus on data structure and quality

5. Focus on their customers

6. Harvest valuable business analytics

7. Conduct annual business reviews

26


Complete Software Licensing Solution

27


Choosing the Right Licensing Models

Time limited Shared

Perpetual

Commuter

Pay-per-use

User reservation

Volume TransactionLicensing (VTL) Hold License / Time

(minimize downtime)

28


Enterprise Features

Queued Licenses

Log file encryption

Capacity Licensing

Redundant Servers*(3 - 11 servers)

License Revocation

Grace Period*

* minimize downtime

29


License multiple modules, components or features within a single product.

Always ship entire product allowing access to specific applications only.

Deliver upgrades by delivering licence updates.

Standard Feature Set

Advanced Feature SetAdvanced Feature Set

Vendor End Customer

Activate standard feature set

Upgrade to advanced feature setNo new software

delivery required

¥ £ $ €

Feature Based Licensing Benefits

30


- Out-of-the-box licensing security solution

Licensing & Entitlement Management

- Web-based software license and entitlement management system

Cloud Services

Secure Software Licensing Solutions

Sophisticated Software License & Entitlement Management

Software Licensing Professional Services

- Packaging, provisioning, metering, and management services for SaaS applications

SaaS Licensing & Entitlement Management Services

- Flexible, highly scalable, enterprise-grade licensing toolkit

Professional Services - Software licensing consulting and implementation services

31


Ask the Experts

Q&APlease submit your question using the

ASK A QUESTION button on your screen

32


The software licensing community to share ideas, find experts, and learn about the latest trends.

LicensingLive Blog www.LicensingLive.com

Twitter www.twitter.com/LicensingLive

YouTube www.youtube.com/user/LicensingLive

LinkedIn http://www.linkedin.com/groups?gid=2878111

BrightTalk Webcasts http://www.brighttalk.com/channel/5572

SafeNet on the Webwww.SafeNet-Inc.com/Sentinel

33


Thank You