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Cloud and Usage-Based Licensing Poised to Transform the Software Monetization Market Finds Frost & Sullivan - The struggle to overcome piracy drives the adoption of software monetization solutions, finds Frost & Sullivan -
Cloud and Usage-Based Licensing Poised to Transform the Software Monetization Market Finds Frost & Sullivan


NewswireToday - /newswire/ - Mountain View, CA, United States, 2014/07/10 - The struggle to overcome piracy drives the adoption of software monetization solutions, finds Frost & Sullivan -

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The continuous need to fight piracy has traditionally driven the adoption of software monetization/software license management (SLM) solutions by software vendors. The three key SLM functions include defining software versions and licensing rules (development), automating license issuance and invoicing (deployment) and ensuring software is used in accordance with terms of a purchased license (enforcement).

Frost and Sullivan's new research, Analysis of the Global Software Monetization Market, discovers that market participants are gradually shifting away from business models based on traditional user- and site-based licensing policies to monetization models centered on the actual use of on-premises and cloud software. In response to this trend, the market earned slightly less than $300 million in 2013 and is expected to cultivate more than $425 million by 2018.

Software monetization solutions lend greater flexibility and lower costs for end users. While the top three vendors (SafeNet, Flexera Software, and Wibu-Systems) remain firm in their market leading position, the market is far from saturated. Across all key verticals - desktop application software, embedded software and intelligent devices and cloud-based applications, there remains tremendous scope for current and new vendors to find lucrative growth worldwide.

SLM solutions are gaining popularity as they enable software publishers and intelligent device vendors across the globe to efficiently monetize their products, particularly for enterprise, networked, and cloud-based deployments. While business-to-business (B2B) software publishers are the most mature users of software monetization technologies, intelligent device manufacturers are becoming a growing end-user segment.

"With the rise of the Internet of Things, embedded device vendors are actively embracing SLM technologies to limit counterfeiting on the production line, achieve dynamic adjustment of product stock keeping units (SKU) after deployment, and manage complex licensing models," said Frost & Sullivan Digital Media Research Industry Manager Avni Rambhia. "As SLM solutions become more user-friendly and compatible with new deployment models such as virtualization and mobile computing, they will attract other vendors not only for protecting top line revenues through piracy management, but also to dramatically improve the bottom line through software-based SKU management and usage analytics."

However, continued weakness in the European economy, high saturation in many verticals within major markets and the shift in traditional computing models are hampering market development. The widespread use of home-grown systems to monitor and enforce license terms is another challenge. This is a key restraint the industry must strive to overcome by educating independent software vendors in the improved reliability and lower total cost of ownership (TCO) that commercial monetization solutions bring.

In societies where piracy is systemic, there is greater dependence on SLM systems, often with dongles, application hardening, or both, to protect revenue. Where societies are respectful of copyright, SLM solutions are predominantly used to assist enterprises in maintaining licensing compliance, gather data to assist in true-ups, and help vendors detect counterfeit products.

"Market participants should make software or software-powered companies aware of the value of making software monetization solutions an integral component of their business during the development, provisioning, deployment, and actual use of the product," noted Rambhia. "They should also integrate application analytics capabilities into the solution so that software-related companies can gather and report various aspects of usage by customers, simplify compliance auditing, and discover prospects for upsell."

Analysis of the Global Software Monetization Market is part of the Digital Media ( Growth Partnership Service program. Frost & Sullivan's related studies include: Global Licensed/Managed Content Delivery Networks (CDN) Market, Global Enterprise Video Webcasting Solutions Market, and the Analysis of the Global Dynamic Publishing Solutions Market. All research included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

Join Frost & Sullivan's interactive Visionary IT portal for the latest Information and Communication Technologies research, insights and tools to make winning, long-term business decisions. Visit:

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Analysis of the Global Software Monetization Market / NC4C-70

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Cloud and Usage-Based Licensing Poised to Transform the Software Monetization Market Finds Frost & Sullivan

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