As the tech world changes through natural growth, consumer trends, and global developments, more companies are relying on commercial Software Licensing Management (SLM) and Entitlement Management Systems (EMS) solutions such as the Sentinel Platform offered by Thales Software Monetization.
Frost & Sullivan market research consulting firm recently studied the factors that are both driving and restraining the growth of SLM and EMs. They found five major trends that are pushing the Software Licensing Management and Entitlement Management markets forward now and over the next seven years.
Below are the five trends that are said to be making all the difference:
1. Changing Needs Generate Growing Demand
Shifts in work locations, the prevalence of cloud-based technology, and the proliferation of connected devices have changed customers’ expectations and the way they relate to software. In addition, workforce shortages have pushed companies to begin to rely on automated alternatives. These factors have contributed to the changing needs of SaaS providers and their customers. In fact, Frost & Sullivan expects these factors to continue to drive an increased need for Software Licensing and Entitlement Management over the next seven years.
2. Increased Popularity of Software Embedded Devices
Software-embedded devices, from airplanes and factory machinery to private cars and dishwashers, have become a central part of modern life. All signs point to this trend growing. The result is that customers expect their devices to do more, so both B2B and B2C companies are compelled to expand their hardware device’s functionality with embedded software.
Device companies are beginning to understand that Software Licensing and Entitlement Management gives them the capability not just to sell software, but also to fully monetize it.
Frost & Sullivan projects that this trend will remain important over the next five years as the market for software-embedded devices grows. In five to seven years, it’s likely to become less influential as we settle into a device-heavy reality.
3. Data from Usage Allows Deeper Insight
A firm grasp of how your customers are using your product is crucial data in any business. This is especially true in the SaaS world where companies must react quickly to changing circumstances and needs on the ground.
Software Licensing and Entitlement Management systems are built to provide companies with information about how their users are interacting with the software. With this information, companies can see low customer engagement early and pre-empt possibility of churn. On the flip side, understanding which features are popular, points to upsell opportunities.
Frost & Sullivan currently ranks this trend as “medium” importance and projects it to rise to “highly important in the next five to seven years. The data that Software Licensing and Entitlement Management systems generates will become increasingly granular – and valuable. Putting a purpose-built licensing and entitlement system in place will keep you ahead of the trend to ensure your long-term growth.
4. Moving from Homegrown to Commercial SLM Systems Grows Revenues
Many companies assume that a homegrown SLM system is the most cost-efficient way to track and control entitlements. After all, if your own engineers don’t know your product and your needs, who does? However, they soon find takes more time and effort than they expected.
This serious issue can keep companies from evolving along with the market. With commercial Software Licensing Management, however, SaaS and on-premises software companies can shift with market changes, without the headache of continually updating internal systems. Entitlement Management makes it possible for them to move licenses and entitlements between users, create tiered pricing plans, and remain agile. The ability to make those changes on the fly lets companies evolve with the market and grow revenue.
5. Anti-Piracy and Counterfeiting Will Drive the Growth of SLM
Piracy and counterfeiting are some of the primary concerns regarding cloud-based software. Knowing who is using your software and how they are using it is vital to protecting your products. The right SLM system gives you the advantage to track entitlements and licensing, and to control who is using which features of your software.
Frost & Sullivan notes that piracy and counterfeiting will remain of “medium” importance over the next seven years.
Constraints
Although the Software Licensing and Entitlement Management sector is expected to show healthy growth over the next seven years there are trends that may slow expansion.
- SaaS providers often don’t yet realize how time-consuming, difficult, and expensive it is to set up a homegrown SLM and EM system. They continue spending time and money building and using in-house SLM and EM systems, despite their inefficiency.
- Asia and Latin America lag the North American and European markets. There is less room for software developers to grow their customer bases in these developing economies.
- SaaS vendors don’t necessarily understand how Software Licensing and Entitlement Management enables growth at scale, reduces churn, and builds revenue.
- Even software vendors who understand the value of the cloud may balk at implementing yet another system.
- Integration costs, which can seem high at the outset, may deter SaaS vendors from adopting an EM or SLM system, or push them towards trying to implement a homegrown one.
The Solution
It is in every company’s best interest to pursue growth and stay ahead of market trends. That’s why implementing a commercial Software Licensing and Entitlement Management system is so important.
Thales Software Monetization solutions has always made data access one of our primary goals because data-driven decisions are the key to efficient growth. For over 30 years, Thales SM has partnered with companies across many industries to help them secure their software IP and integrate robust SLM and EM into even the most complex software ecosystems.
Thales SLM can help you unlock the value of your software and stay ahead in an ever-changing environment. Visit our website www.matrixinvent.com to explore more software solutions or contact us today!