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The Dynamics of the NEW Software Industry: What it Means for Software
Companies
Ken Wasch, President, SIIA
Current State of the Industry
History of Software• 1950
– Mainframe: IBM
• Mid-1960s– Mini-computers: DEC, Wang
• 1981– PCs: IBM, Microsoft, Compaq
• 1995– The Web
Basic Parameters
• Packaged software• ERP• Simple EULA• Perpetual License• Volume Discounts• Electronic Licenses• ESD• Service/Maintenance
This is all about to change….
What is a Software Company?
The Network exacerbated the complexity of the Industry.
The direction of the Industry has shifted.
Evolution
client server
Network computingNetwork computer
Web server
Database server Application server
A NEW Software Industry is Being Born!
• New Models• New Ways of Thinking• New Companies• New Practices• New Form Factors
New License Terms……
• New Models…
New Models
ASP: The Predecessor
New Models
Software as a Service: The Movement
Software as a Service
• Not an ASP
• Clients access services (software) through a web browser form any web-enabled appliance.
• How do you license this kind of service?
New Models
Web Services: The Future
New Models
Open Source: The Disruptor
Open-source to patents
There is a growing tension between the rise of open-source and the expanding options for propriety control– Open-source’s GPL is at one end of the
IP spectrum– Patents are the other end
Why?
• Piracy Issues• Change the Relationship with the
Customer• Customer Demand• New Form Factors (Mobile, Handheld)• New Revenue Opportunities
• What does it mean for Licenses?
• The industry has entered a period in which it is no longer the technology itself that is central, but the value it provides to businesses and consumers.
Irving Wladawsky-Berger, IBM
The Future of Licensing
• The License Disappears• Shift to Maintenance and Service• Non-Perpetual Licenses Costs• Monthly Subscriptions• Usage Based• One-Time Licenses
The Future of Licensing
• Free + Services• License + Extra Service• Modularization• Per User• Selling across Devices
Current Examples
• Salesforce.com: User-Based
• Sun Microsystems: Project Orion
• IBM: Utility Computing
• Microsoft: LiveMeeting
• Microsoft: Software Assurance
• Intuit: Product Activation
Things to Consider….
• What works for you? • Work with the flexibility• How does it open new avenues? • What is the TCO? • How can you shift resources? • How can you be more dynamic?
Pervasive Computing
When every appliance can be web-enabled, communicating seamlessly with other devices, the shape of the industry changes drastically,
