Software Pricing Has Changed - But Not All Vendors Know It Just Yet

The traditional commercial software license has, for a long time, come in two flavors. With the advent of Software-as-a-Service, licenses are changing for the better.

End-User License Agreement

There is the standard End-user License Agreement (EULA), also known as a shrink wrap license, which usually gave a consumer a perpetual license to use the product. The EULA usually includes restrictions on copying — typically a consumer could make one backup copy — and transferability of the license. It is intended to serve a single user on a single computer.

This licensing model is difficult to manage beyond a few users. Ensuring compliance with EULAs is a daunting task for IT administrators. It is also a difficult model to scale, either up or down. Administrators have to factor time to purchase new licenses — and sometimes media — when employees are brought on, but find they can’t easily relinquish them when those employees leave.  

Enterprise License Agreements

Then there are enterprise license agreements. These are driven by contracts that vary widely from company to company and vendor to vendor.

In general, an enterprise license agreement gives a company a number of licenses for a defined period of time, although that period may be forever. More often than not, a yearly maintenance fee covers support and upgrades but really is intended to provide an annuity to the vendor.

Administering licenses under these contracts can be complex, requiring that a minimum number of licenses be purchased or that IT forecast the number of licenses ahead of time. IT always runs the risk of predicting wrong with costly results. Periodic audits to ensure compliance with the terms of the contract are also burdensome.

SaaS Changes Licensing for the Better

With the move to Software-as-a-Service (SaaS), often referred to as cloud apps, software licensing has dramatically changed for the better, from the purchaser’s perspective. The most common model is the per-user, per-month subscription.

Unlike the other commercial licensing schemes, users are provisioned or deprovisioned immediately. The monthly subscriber model creates a tremendously elastic system where the number of licenses can fluctuate with the number of users. Monthly subscriber models and SaaS applications make it easy to scale up and down as needed.

The model also allows temporary users such as contractors and seasonal workers to use the same applications as others in the company without a long-term licensing commitment. The sheer flexibility of the model helps create a more flexible and agile environment.

Not only is the monthly subscriber model more flexible, it’s easier too. Licenses are managed automatically and there is no need to perform time-consuming and costly audits for compliance with licensing agreements. The cloud ISV takes responsibility for managing the license pool and billing accordingly.

Ultimately, this makes managing software licenses less costly and distracting with less legal risk.
A lot of the attention given to cloud computing focused on it as a way of turning the infrastructure CAPEX into a monthly OPEX. Another advantage that has been discussed at length is allowing IT to focus on the business of IT and get away from managing data centers. All of that makes sense, but the organizational agility created by the monthly subscriber model is also a major value of the cloud application model. 

Image courtesy of alexscopje (Shutterstock)

Editor's Note: To read more of Tom's thoughts, check out Social Task Management: A View of the Future

 

 

Source : cmswire[dot]com

Is Anxiety About Our Wired Choices Misplaced?

Instead of dialing up our anxiety about privacy in the changing online world, we should use it as an opportunity to question and test the security of everything--driver's licenses, plastic credit cards, paper medical records.

As an engineer and a millennial who has grown up with an Internet connection, I’m constantly connected to some device. I read email while I’m running on the treadmill. I built an app that knows where you are at all times, which more than two and a half million people opted in to using. Not everyone consumes technology as voraciously as I do, but nearly half of Americans tote around smartphones. As we become more keenly aware of these phones’ ability to track our every move, strangely almost in lockstep we find that we can’t live without them.

Why do we have so much anxiety about being found when we clearly choose to be wired?

If you want to live a truly private life, ditch your mobile, disconnect your Internet, pay with only cash, get rid of your highway toll transponder, forget about loyalty cards, stop answering the census, stop answering the door, build a bunker somewhere underground in New Hampshire (live free or die), drive a pre-2005 unregistered vehicle without a GPS (or better yet, a horse without a GPS), stock up on canned goods, become extremely paranoid--and don’t forget to hide from the IRS.

Unfortunately, going all Thoreau isn’t an option for most of us, despite our desires to keep our online identities under lock and key. And as the recent epic hacking of Wired reporter Mat Honan tells us, we aren’t entirely immune.

But, all things considered, we should be far more paranoid about the real-world constructs centered around identity that we’ve failed to question for decades -- sometimes even centuries. The problem is, we’ve grown up with so many blatant divulgences of personally identifiable information that we think are completely safe.

Nothing could be further from the truth.

Why don’t we question things like credit cards we carry around in our wallets that link our personal information to static and easily visible digits on a piece of plastic? We willingly hand this piece of plastic to strangers almost daily, allowing so many opportunities for massive fraud to happen. Not to mention we print our social security numbers on paper cards and sometimes even send them--unencrypted--over email.

I’d argue physical media (be it paper or plastic) is our identity’s public enemy number one. From medical records to mortgages, there’s so much paper in the world that exposes our identities to anyone who can open a folder in a filing cabinet.

To contrast, the online world that we understand considerably less is a far safer one. Technology is uprooting some of these decades-old constructs that just don’t work, and shouldn’t be status quo for our modern lives. But technological change understandably scares us, as most revolutions do.

That fear is not totally irrational. The trade-off here is one of scale of security breach. While storing your medical records on paper in a doctors office allows for easy data theft, the limit of that theft is the size of the office. It's easy to break into a doctor's office (I don't know this from experience -- promise!) but you can only get a couple hundred records. On the other hand, while digital storage is incredibly hard to break into, if you do make it in, the scale of the breach is hundreds of thousands of records.

In my opinion, this is a good tradeoff. The absolute value of data theft should decrease with intensely secure centralized storage. Yes, breaches are larger, but there are far fewer of them. The lesson here is that we need to take that natural scale of the Internet into consideration when designing systems that touch sensitive data. Encryption is critical. Human security perhaps even more so. But also old-school techniques like dividing the data across multiple systems with heterogeneous security systems and completely different architectures.

My hope is that consumers will simply be more aware of these tradeoffs. If it turns out that there is a more secure digital solution, let's analyze, optimize, then embrace it. Payments is a prime opportunity. If there isn't a better digital solution, then let's stick with the current physical solution until technology evolves to offer a better one. Driver's licenses are perhaps the most poignant example of this, and they are the last thing that still forces me to carry a wallet.

No matter what, I’m happy that we’re questioning technological changes and becoming more informed consumers. Maybe we should be using our anxiety about our changing online world as an opportunity to question everything, no matter how long we’ve managed to put up with it.

--Author Seth Priebatsch is the founder and chief ninja of LevelUp and SCVNGR.

Source : fastcompany[dot]com