SAN JOSE, Calif.—Macrovision Corp. launched the next iteration of its software licensing platform, promising that software publishers will have the freedom to select from multiple business models including utility pricing.
Macrovisions launch of its new FlexNet platform formed the centerpiece of Mondays SoftSummit e-licensing show here. Macrovision will launch FlexNet with a variety of partners, including Intel Corp., OpenChannel Solutions, InstallShield, Tally, Element 5 and IntraWave, according to Dan Stickel, executive vice president and general manager of the software technologies group at Macrovision.
While Macrovision has maintained a relatively low profile, the company claims to be the leader in electronic licensing, counting 2,500 customers to date.
Although consumers have strongly resisted any sort of e-licensing or digital rights management solution, Stickel attempted to position FlexNet as an ideal solution for software publishers and IT managers alike.
Publishers can design and deploy new software without the “revenue leaks” associated with piracy, Stickel said. From an IT perspective, companies can stop worrying about compliance.
“As soon as new software gets purchased, there are often immediate changes, such as downsizing or new hires,” Stickel said. “No one remembers exactly how to use [the software], and the last thing a poor IT manager wants to do is look at a 60-page contract.”
FlexNet will be deployed in three packages: FlexNet Manager, for management of e-licenses, which will enter beta this December; FlexNet Publisher, for software developers, which will ship in final form in January; and FlexNet Connector, tools to connect the published software to the licensing mechanisms, which will ship sometime in 2004. FlexNet Publisher will be an automatic upgrade to Macrovisions existing “Flex lm” platform, although the company will charge for some of the premium offerings of FlexNet, including utility pricing.
FlexNet was designed to be as flexible as possible, and customers will be able to deploy the software on as many as 25 different operating system platforms, including handheld operating systems, Stickel said.
However, the company is touting “utility pricing” as the softwares most useful upgrade, a feature being beta tested by many of the companys customers. Software publishers will be able to charge users for how much they actually use the software, instead of charging them a fixed per-seat license, Stickel said. The licensing certificate will connect to a back-office server at Macrovision and communicate how much the software has been used, so that customers can be charged appropriately.
Publishers will have the option to mix and match business models, as well. For example, a software publisher may choose to provide a customer with a 100-seat license with the ability to shift into a utility-based “overdraft” model during a critical programming period, where additional users could be accommodated, Stickel said.
On the flip side, IT managers will benefit from being charged exactly how much their user base uses the software, Stickel said. For example, customers are often unable to connect to hosted applications such as Salesforce.com through some client-side problem, such as routine maintenance or a network outage.
The FlexNet software will also have the ability to allow limited feature-level pricing, where publishers will have the ability to charge for additional features—or where IT managers will be able to purchase only the features they actually use.
That may create some sticker shock, Stickel acknowledged, as customers work out new estimates of what software they will actually use.
On the other hand, Jacqueline Woods, vice president for global licensing and strategy at Oracle Corp., said that her economics background had proven that utility pricing only works in specialized cases.
For example, cable television is considered to be a utility, although a customer can watch 1 minute or 100 hours per month and be billed the same price. A true “utility model” is based on the electric company, which uses a “lights-on, lights-off” model to regulate customers.
“In terms of my economic background, Ive found that customers end up paying more money,” Woods said, and that the typical per-unit cost actually goes up.
Instead, Woods said, customers will probably opt for something like an 80-20 split favoring traditional “perpetual” licenses to software, with the utility model kicking in under specialized conditions, such as the crunch right before a deadline.