IDC has predicted that cloud software will grow to $54.6 billion by 2019. It’s no secret that more and more businesses are moving their workloads from on-premise to cloud, a transition that is driven by two factors: What customers and/or competition are dictating, and the need for businesses to expand their reach to new segments.
Back when cloud was the new kid on the block, CTOs and CIOs were eager to learn how the technology worked, what sort of things they could push to the cloud, and how it would affect application usage. Now that the cloud is perceived as a less disruptive, more viable technology, the question is how to take full advantage of its capabilities to benefit the business, says Jamie Longmuir, regional director of software monetisation, Gemalto
Many businesses have not realised that when paired with the right management tools, the cloud can be leveraged to sell additional service lines and generate extra income. The connected car is a prime example of this. Nowadays, users expect to automatically be connected to everything from their phone to their GPS and their Spotify. With software content representing nearly 16% of a vehicle’s value, manufacturers like BMW, are now forming IoT cloud departments to address new, non-core products. Banks, utility and medical device companies, for example, generate a lot of data that has a number of potential uses beyond analysis. They must now decide how to harness it in order to sell additional service lines, as well as for predictive maintenance purposes.
As a result, over the last couple of years, industry players have become increasingly familiar with the general concept of cloud licensing. In other words, the need to fully understand how their software is being consumed, right down to what features are being used and how often. This puts them in a position to offer multiple versions of the same product, at different prices, bringing in extra revenue and optimising investment and resource allocation based on actual end-user behaviours.
However, delivering products or services through the cloud doesn’t always mean that companies have the ability to be granular in their usage tracking, especially as many don’t know what it is that they should be looking for. This is why many businesses are turning to software monetisation solutions to leverage the cloud, and better meet customers’ requirements. For software providers in particular, success is reliant on a lot more than just building a useful service in the cloud; it also depends on the organisation’s ability to effectively monetise that solution.
At the same time, businesses realise that maximising revenues is not enough to guarantee success. Though an increased use of cloud technologies has opened up many doors for companies in every space, it has also heightened security risks including tampering, reverse engineering and theft and licensing infringement. In fact, recent reports show security teams face an increasing number of threats. Instead, specialised solutions can constantly update software security and increase its protection against attacks, giving vendors control and visibility into how applications are deployed and used. The adoption of software management and protection techniques can prevent the unauthorised use or distribution of developer’s intellectual property – their software – avoiding software piracy and ensuring software license compliance.
In order to be successful, today’s businesses need to be able to transform their strategies and deal with the complexities of this new age and optimise the amount of money they make while doing it. Consequently, companies are increasingly looking to expand their cloud go-to-market strategy and they want to know which licensing models are right for their businesses and how to optimise their offerings. Only those that employ a strong software monetisation strategy, consisting of software packaging, control, tracking and management techniques, will reap the real revenue benefits of the cloud.
The author of this blog is Jamie Longmuir, regional director, software monetisation, Gemalto
