Software Licensing Part 4: A Cloudy Wrap Up

What about the future? Across all the license types discussed, they can all be easily cloud-ified by vendors providing a subscriptin license method that can fit within a cloud definition, in particular being scalable, adjustable from month to month, or incorporating resource pooling and multi-tenant capabilities. Some vendors have made efforts here, but most are doing it the form of bundling the subscription with the hosting service, otherwise generally known as SaaS. Some software vendors are providing SaaS but also offer the traditional perpetual license that can be managed and located by individual customers or tenants. So the two predominant models serve the Customer (Perpetual) and the Software Vendor (SaaS). They do not do much for the service providers, which could bring significant benefit to all three stakeholders.

For the AEC Tech Industry to truly change, software vendors will need to offer a subscription license that can be managed by partners in the hosting or managed services business. A good example of this is Microsoft and Citrix. Both offer licensing in the traditional perpetual model, SaaS model, and have options for service providers called the Microsoft SPLA or Citrix CSP programs. My company is one such service provider so I'll explain why this is not just self serving.

If service providers would offer more products in a subscription model, effectively a service distributor channel similar to Microsoft and Citrix, some key benefits would be; Software Vendors would benefit from less overhead to manage, educate, support, audit and collect revenue from partners than a high percentage of their customers currently require. Service Providers would benefit from being in a formal partner program that enables this type of high value relationship with a vendor and customer. They would also be able to offer solutions that are not possible in the current Software Vendor SaaS landscape due to business model dilution, customer need conflicts, and technical focus. Customers would benefit from all of the above as well as innovation around application management and competition.

I could get into all kinds of reasons this has not happened in the AEC space, some business, some technical, some paranoia, but I do think it will and needs to happen over time. All three methods have their pros and cons, and I believe will be viable for many years. As the cloud world grows, and more importantly buyers mature, there will be a greater need for the SPLA option.