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    April

    20 2017

    How ISVs Can Overcome the Challenges of Software Monetization

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    ISVs Software Monetization - Cygnet Infotech

    New emerging business models have pushed ISVs to innovate in terms of flexible payment models, manage entitlements, and control usage, as well as track and aggregate product-usage data to inform business decisions and enable continued innovation.

    Addressing these challenges will be a gamechanger for ISVs and by equipping themselves with the right strategy and tools, they can transform them into opportunities for growth. As technology is evolving, it is   enabling ISVs to deliver their software in various ways like – subscription, freemium, consumption-based, feature-based, outcome-based or a combination of these, software pricing, packaging and monetization offers more opportunities and challenges.

    According the latest IDC FutureScape: Worldwide Software Business Models and Monetization 2017 Predictions, ISVs across diverse sectors are likely to replicate flexible, digitally centric business models like subscription based pricing, consumption-based pricing or outcome-based pricing. Further, they will also have to change the way they price and package their products.

    How ISVs can Overcome the Challenges of Software Monetization

    A great software apart, in-order to ensure success, an ISV also needs a thorough understanding of the buyer and their consumption behavior. Thus, with the right monetization strategy in place and ability to adapt to enterprise user demand across multiple devices, an ISV will be able to overcome challenges in licensing and monetization, thus generate more revenue opportunities.

    Comprehensive Software Monetization Strategy:

    ISVs can optimize the profitability of their software application by establishing a software monetization strategy that includes software pricing, packaging and licensing.

    ISVs must consider monetization not just as a means of collecting revenue by selling rights to use intellectual property. Instead, it should be viewed as an enabler to further revenue growth through delivering software in flexible ways that customers want to consume.  This is possible by having an effective software monetization strategies and a cohesive licensing team to future-proof the software application. An effective software monetization has 4 cornerstones and it includes

    • Packaging
    • Control
    • Tracking
    • Management

    ‘One Size’ never ‘Fits All’ and therefore ISVs will need to offer flexible pricing and licensing models to enable their product reach maximum potential. By understanding the what, the how and the how much, ISVs will be better able to deliver product versatility, flexible licensing models along with the business agility to quickly adapt to the evolving needs.

    Software Usage Tracking:

    For an ISVs to stay competitive in the ever-evolving market, it is essential that they track consumption and usage of the software application and how their software is being consumed. It offers insights to price the software in line with customer’s needs. By delivering in ways that customers want to consume not only helps build trust but also helps ISVs differentiate themselves in the ultra-competitive marketplace.

    This helps them take better investment decisions and focus efforts where engineering and development efforts must be targeted. Thus, by tracking real-time use of their product, ISVs can provide flexible and sophisticated pricing model with a more user-centric basis. By understanding customer usage in real-time,  ISVs can expand the current customer base and venture into untapped markets.

    Monetize Individual Features of your Software Solution

    Apart from addressing their pain-points, customers have a definite preference when choosing your service and if you are unable to offer a flexible monetization model that aligns with how they do their business, they will likely choose your competitor, even if it is less attractive.

    Package Goods According to Customer’s Preferences

    Customers expect quicker deployment, lower up-front cost of subscription model, and predictable ongoing expenses together with the ease of installation and the ability to work with the latest and most up to-date version of the software product. In the connected ecosystem, ISVs can differentiate themselves by catering to user’s demand for anytime, anywhere, any device access to their products, thus putting users in control of how they want to access the software and thus deliver unique value.

    At Cygnet, we ensure with our Product Engineering Services that they effectively package, provision, control, monitor, and manage in-order to offer better customer experience and stay competitive in the fast-evolving market.

About Cygnet

Our motto ‘IT is About You’ is more than just a tag line – it is the very heart of Cygnet. We always ensure the continued success of our clients and employees by placing problem solving ahead of anything else and walking the extra mile when needed.