Over 90% of independent software and smart device vendors (Isv and Idv) lose profits
because it does not offer the flexible licensing models that customers demand. More than half (54%) of these, according to new research by Thales, blame the loss of profits on demand for more flexible licensing models. The research comes as the landscape of software distribution and rights management is changing. Analyzing more than 400 global ISVs and IDVs, the Thales State of Software Monetization Report 2022 found that nearly three-quarters (74%) of software vendors expect an increase in software-as-a-service (SaaS) delivery via the cloud.
In addition, two thirds (66%) of respondents expect more software to be distributed in a hybrid manner that exploits both on-premise and the cloud according to research released by Thales whose Group deals with solutions, services and products in the aeronautics, space, transport, digital identity and security and defense markets. Vendors have described approaches such as SaaS as significant benefits, with better user experience (40%) considered the most important, ahead of better customer value (34%) and higher earning opportunities (30%). However, research shows that the push for a digital approach also poses significant challenges for vendors when it comes to licensing and authorizing their software. In fact, 40% of respondents admit they have difficulty licensing their solutions across multiple devices; while the same number reports having problems with different distribution environments.
The data still shows that over a third (37%) find it difficult to support the growing number of users who work remotely. In addition to these challenges, analysts point out that vendors may face problems due to customer misuse and compromised software. ISV and IDV estimated that more than a quarter of their software was unlicensed in the past year. Almost all suppliers surveyed (90%) say their revenue is directly impacted by license agreement violations and they fear their software could be stolen
, tampered with or copied. “It is clear that suppliers need to offer flexible management of licenses and related rights to meet diverse customer needs, ”said Jake Fox, Thales Vice President, Software Monetization, Product Engineering & Services.