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ISVs facing licensing pressure

A report from Gemalto has revealed that ISVs are facing increasing pressure to be more flexible in the way they allow users to pay for applications

Steps to crack down on software piracy have reaped some fruit in recent years but the fear of losing revenue as a result of users failing to pay licenses or having intellectual property compromised continue to be major concerns for ISVs.

The software that developers bring to market is their livelihood and if it is not paid for, or reverse engineered and copied, then it can put their entire business at risk.

Over recent years there have been a catalogue of cases where users, usually caught out by the Business Software Alliance, have held up their hands to failing to pay for the use of their software.

In the worst cases some specialised software packages designed for specific industries have been copied and even sold online, undermining the very existence of the ISV that developed the programmes.

Research from Gemalto revealed that the pressure on ISVs is not just coming from the way their software is used but also in the way it is paid for.

Customers are also changing their expectations around the way they pay for software and ISVs needed to be more flexible in the way they let people pay for applications.

The firm's State of Software Monetisation Report, revealed that there were frustrations on both the developer and consumer sides with one of the conclusions being a need for more flexibility around licenses.

Another finding was that currently vendors are viewed as not doing enough to get the message across to users about the need to keep on top of licenses.

“The way that software is consumed is changing – whether users only want certain features, to use it on the device of their choice, or only want to pay for what they use,” said Shlomo Weiss, Senior Vice President, Software Monetisation at Gemalto.

The pressure is on ISVs to react to market changes and evolve their software to meet the demands from customers. At the same time user expectations are increasing around the delivery options and they expect to be able to pay flexibily.

The report found that keeping on top of licenses was already a challenge for ISVs, with many not being totally confident in their back office handling of renewals.

“Independent software vendors (ISVs) have to keep up with the changing demands of their customers. We see that piracy, reverse engineering, and deliberate and unintentional misuse are all still monetisation concerns for ISVs. However, now more than ever, delivering software in ways that customers want to consume it is critical for creating a user experience that sells," added Weiss.

The other interesting conclusion from the report was the growth in numbers of ISVs that were worried about piracy. More than last year were worried about the use of unlicensed products.

But ahead of piracy and licensing agreement violations was the worry that they would be hit by the competitive theft of their intellectual property.

Developers are also looking for vendors they work with to do more to encourage enterprise customers to ensure they are compliant with licenses.

The report found that 80% of ISVs think software vendors could provide more clarity around processes/audits; and 72% thought software vendors could improve usage tracking/audits.

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