As part of this month’s SAMPanel debate Sherry Irwin, a President and Principal Consultant with Technology Asset Management (TAM) gave her view on the question “How can Software Vendors Simplify their Software Licensing Rules?”

The emergence of increasingly complex license models (rules) began in the 1980s, ostensibly to better align license costs with customer value (and affordability), where value was associated with the size of the machine on which the software was installed: the larger the machine, the more the software would be used and the more value obtained.

For several reasons, this foundational premise proved to be erroneous in many situations; but, it did have the effect of increased revenues for software vendors – a windfall not to be ignored.

So, today both customers and vendors have to deal with complex, often nonsensical, license models (rules), for which significant and dedicated resources are required; and, which create conflict, while taking time and resources away from productive activities.  The aggregate total costs (tangible, intangible, opportunity) in attempts to align license fees to value has exceeded any intended benefit.

Bottom line: Software vendors are going to generate their target revenue, one way or another; so, it is less about how much and more about how, and the resultant impact on all parties.

What is needed?  In addition to clearer licensing (Campaign for Clear Licensing), the industry needs simpler licensing, especially as we move towards the Internet of Things. Simpler licensing could include any or all of the following characteristics:

*Device independent; or less granular device dependencies
*Person independent (employee, non-employee)
*Work independent (e.g., casual, full)
*Location independent (subject to applicable legislation)
*Elimination of access-type licenses, where no software is actually installed

Industry standard license models and terminology (definitions) would also simplify licensing; but, that seems unlikely, as some (most?) vendors view their license models as a competitive differentiator (and a means by which to create lucrative confusion?).

In addition, as to software support and maintenance services, there needs to greater flexibility, such that customers can select options that better align with their needs, which may change over time.

About the Author

Sherry Irwin | President and Principal Consultant at Technology Asset Management | Connect with Sherry

Sherry Irwin, founder (1995) and President of Technology Asset Management Inc., has over 30 years of experience in IT/software asset management (ITAM/SAM), including license, contract and vendor management, across a broad spectrum of industries. She is widely recognized as a pioneer, expert, educator and advocate in this maturing discipline, including as an IAITAM Fellow. Sherry also founded (1992) and sponsors the Canadian IT Asset Management Users’ Group – an industry first – and is the Canadian delegate to ISO ITAM working group (19770).

About Technology Asset Management Inc.

Technology Asset Management Inc. advises clients on ‘good enough’ practices for lifecycle IT/software asset management (ITAM/SAM), with a focus on minimizing costs, minimizing risks, and maximizing benefits related to IT investments. Additionally, TAM Inc. offers ITAM education and training, including as an IAITAM Accredited Training Organization, and a mentorship program to accelerate knowledge transfer based on organization-specific strategic and operational issues, situations and decisions.