Like many others, we believed the arrival of multi-tenant SaaS applications and solutions would effectively sound the death knell for traditional On-Premise Software and consequently the need for traditional software licensing.
Some of us are old enough to remember the days of Mainframe Computing evolving to Mini-Computing. Having gone through many technology iterations since then, you soon realize that the only constant in the World of Software is changing.
However, although the actual overall percentage of software revenues from pure SaaS applications or subscription-based offerings continues to grow at pace, SaaS and subscription-based revenues currently represent slightly less than 50% of the market and are only forecast to overtake Licence and Maintenance Revenues in the by 2022 (IDC).
Now, the emergence of the new IoT ecosystem and Fog Computing, with dynamic deployment of containerized software across the Heterogeneous Cloud-to-Edge (C2E) continuum, looks set to change the Licensing world yet again.
Up until relatively recently, deployment options looked fairly straightforward. Applications would be SaaS by choice, possibly with light mobile clients, and On-Premise/Hybrid by necessity. Some applications would always be more suited to an on-premise Desktop/Server platform and connectivity issues such as Security or Bandwidth (e.g. In-Flight) could determine that occasional connectivity was the best that could be expected.
Otherwise, a SaaS model appeared to be the default.
Now, in some application areas at least, that is all set to change again. More and More, ISVs and Solutions Providers are encountering issues with Cloud-Based Solution deployment models and IoT, not least in areas such as latency. The solution appears to be in models where processing is located as optimally as possible and this means there is an increasing shift towards hybrid cloud models incorporating Fog and Edge devices.
IDC projects that the amount of data created by connected IoT devices will see a compound annual growth rate (CAGR) of 28.7% over the 2018-2025 forecast period. Most of this data is being generated by video surveillance applications, but other categories such as industrial and medical will increasingly generate more data over time, further boosting Fog and Edge computing.
Also, when looking at the impact of IoT, 451 Research sees that most organizations today process IoT workloads at the edge to enhance security, process real-time operational action triggers, and reduce IoT data storage and transport requirements. This is expected to grow over time as Big Data and AI drive analysis at the edge with more heavy data processing at the edge.
With software being deployed remotely at scale outside data centers, licensing is once again appearing on the Radar, albeit with a different set of requirements. Traditional Copy Protection may be less of an issue but modern, Smart Licensing capabilities such as dynamic feature allocation, user control, usage tracking, and subscription management are likely to feature as key requirements.
New License management systems and processes are needed but so too will change to business and commercial practices. Flexible, dynamic licensing and Entitlements Management will require equally flexible subscription and billing systems, probably including usage charging and post-pay “true-up” plans.
For many ISVs, this will not be a problem because their application will still be best suited to SaaS or a traditional On-Premise model. For others, it is already an issue they are grappling with. Some existing applications, platforms, and solutions will inevitably evolve to these new models, but the real growth will likely come from new innovative Start-ups and New Product initiatives from existing vendors in solution areas that are still in the concept phase.
Whichever way this progresses, one thing is certain. ISVs will have to think again about Licensing Models and how they can use as “business enabler” rather than a protective barrier.
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For more information on flexible licensing management – visit www.inishtech.com
