The new software license world according to B-lay

01 feb '10 - Mark van Wolferen - share: LinkedIN Mail

It is rare that new markets are formed. When they do, you hear about it when it is done or already irreversibly happening. To many the creation of new markets go fast and unexpected, to insiders it is a slow process and not regarded as building a market but merely moving from a to b in the most logical way. Software compliance/license management is a market, for sure it is new!

Of course this has been going on for years and the concept is far from new. Software compliance and license management has gained lots of publicity under the sexy description of Software Asset Management (SAM), and its star is rising quickly. New markets attract new players, so many SAM firms have been starting up over the last 5 years, while software publishers without compliance activities started to deploy them. The market is there, it's new, now were are we headed? Our "Tour de SAM" below will divide the market into three major groups: software publishers, end users, and the SAM service industry.

Tour de SAM

This service industry has a rich variety of players. Outplacement firms who hire SAM managers, tool vendors who build SAM tools or related software, management consultancy, negotiators, Independent SAM consultants and more. All these parties are moving into this new market from different directions; financial auditing & risk control, system management, software sales, commercial negotiation, help desk, IT control, law practice, etc.

The publishers or vendors drive this market. They need to protect their intellectual property in a digital world and the deluge of details creates customer dissatisfaction and revenue opportunities. The SAM service industry has discovered a revenue opportunity to support the publishers in the execution of their licensing practices and/or the end users in assisting or managing the complexity for them. 

The end users are the last ones to get engaged. They have to adhere to their contractual obligations with the publishers and this kind of compliance moves upward on the agenda as it becomes clear that managing software licenses should be taken as seriously as managing all other assets. SAM can, if done properly, provide cost savings, improve efficiencies, and help optimize a company's operations. It also keeps the ever-increasing audit teams of your back.

A Software Compliance Diamond Rush

B-lay sees a promising opportunity in this new market, and similar to how Cecil Rhodes entered the diamond industry, B-lay will enter the software compliance/license management market. Mr Rhodes, founder of legendary diamond company De Beers saw an opportunity in the turbulent diamond rush that started in 1867 in South Africa. He did not entered the market as a competitor i.e. diamond miner but started in a supplemental niche by renting water pumps to miners. B-lay does something similar. We aim not to compete with the existing parties, but to supplement them and make them more efficient. We want to link their success to our success and vice versa.

To find the water pumps of the SAM industry B-lay compares this market with the tax industry. In tax there are three major players: the tax service, the legal tax entities that need to comply with the tax and a service industry for this process. By looking at the evolution of the tax market, lessons can be learned for the SAM industry. Just to name a few:

  • Acceptation of inevitability - End users of software will accept the audits done by publishers as inevitable. This will make it more accepted and will allow smaller software publishers to also start using audits of a means of IPR control.
  • Polarization of the service industry - There is an ongoing struggle in the service industry to partner with the software publisher, as well as serving the end user interest. This creates conflict as well as unclarity. Looking at the tax market it is clear that this bi-polarity will decrease and more companies will support the end user. In today’s market there are clear examples of companies and individual contractors that have already taken sides.
  • Growth of end user compliance statements - There will be an increase in statements by end users on their situation. This will not be done every year for all vendors, like the tax declaration model. It makes good sense to be upfront and open, instead of waiting for an audit. This is attractive for the publishers as well as this will smoothen the customer relationship and avoid conflict. The major gain for end users is that time and resources consuming audits are avoided and IT spend can be budgeted without any large financial surprises.

Use Lictionary to Enhance Your Software License Intelligence

Analyzing the tax model has also allowed  B-lay's  founders to discern the many service opportunities. In every country there is a tax guide; a rule book that does not take side but provides a factual overview of the required rules, definitions and shares knowledge. This service is aimed at both tax authorities, the service industry and to end users who have to comply. B-lay has started to build and deliver this large and complex intelligence system. Not as a physical guide, but in a digital way - the right choice for today’s information age.

The data and structure to enable this will be delivered by B-lay in many formats. One example is a public community place at www.lictionary.info that we will be building over the next period of time. Yet another is providing the infrastructure and knowledge base to allow declarations to take place. This is based on the urgent request of specific vendors, (groups) of end users, or companies that manage the systems of larger groups of end users.

For more on all these new SAM subjects, please contact B-lay at info@b-lay.com

Oracle Database and hardware infrastructure

The required number of licenses for Oracle’s Database programs are (almost) at all times related to the hardware infrastructure on which the software is installed. Incorrect interpretation or understanding of whether the software is deemed to be installed and how the installed software should be licensed in a certain specific hardware infrastructure is by far the number 1 license compliance issue. 

Oracle Database and hardware infrastructure

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