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– where customer usage exceeds contractual terms . Without software compliance controls and monitoring , customers can easily over-deploy or over-use software . This is especially true for large customers who find efficient ways to deploy large amounts of software or software upgrades using distribution methods and have no good methods to reconcile against the entitled amount . This over-usage amounts to revenue leakage , because the producer is not getting paid for software that has been deployed and is being used by the customer .
Developing a world-class digital goods supply chain As companies move to expanding their hardware supply chain or create a software supply chain , we focus on the 3Ps , summarised below as a way to
‘ When a company manufactures physical goods , it ’ s easy to identify defective material that becomes waste and a drag on the bottom line ’
minimise waste and maximise revenue :
• Pricing ( and licensing ): Hardware is usually priced on a cost-plus basis – the price is determined based upon the cost of goods plus a margin . Software or software enabled functions are priced based upon customer value since there is no cost of goods equivalent . This means determining a scalable pricing meter that captures the value the software provides , and pricing it according to what the market will enable . The meter might be a measure of speed , additional functions , or increased capacity . This should include a pricing model for maintenance , which often includes the access to new capabilities . Starting with an effective pricing and licensing model ensures that producers have designed their offering to maximise revenue ( or meet some other business objective ).
• Protection : Software , by its very nature can be copied and overused if there are no adequate controls . Adding or embedding licensing technology to the software ensures customers cannot over-use or over-deploy the software by providing some form of enforcement experience such
26 February 2016