Software Licensing Model Category Intelligence
Report Coverage
- Licensing Model Analysis
- KPIs for Software Licensing Metrics
- Negotiation Pointers
- Supplier Profiling and Licensing Models
Market Size
Global Market Size
$14 - 15 Bn
Software Licensing Model Market Trends
Category Intelligence on Software Licensing Model covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
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Industry Outlook & Drivers
Global Market Outlook on Software Licensing Model
The global software licensing market is expected to grow at a CAGR of 8–9 percent to reach $14–15 billion by 2023.
- About 80–85 percent of the existing, as well as new suppliers or entrants, will offer subscription-based licensing models by the end of 2020
- SaaS is becoming a mandate for software suppliers to be included as an option to remain in the market
- Pricing will become competitive, and licensing policies will become effective, due to rapid technological development and increased demand
- About 35–40 percent of the applications will be delivered as installed software, thus avoiding the necessity of explicit installations
- The existing licensing models are suited in the current scenario, but customer requirements play a vital role in choosing the best-fit for the organization
- Majority of the suppliers uplift an annual maintenance renewal of 20–22 percent. This is purely dependent on the requirements
Software Licensing Metrics
- Suppliers often play with metrics to create a win–win situation for customers as well as themselves. Factors considered for the following metrics are the standards, whether the right metric has been mapped with the product, cost-effectiveness, reasonable pricing for the customers, and value for price & features.
Evolution of Software Licensing Models
Current Models
- Considering the customer's demand and interests, three models currently exist in the market
- The models are perpetual, subscription based, and consumption based
Mix and Match Models
- Models that took investment, cost-effectiveness, and usage analysis into account
- These models usually create a win–win situation for both customers and suppliers
Conventional Supplier–Client Models
- This forms the basic foundation for all software licensing
- Started with purchasing licenses per user, followed by multiple users and time limitation
- Catering to increased demand and software usage, suppliers started to bring variety to meet the required demand
Partnership Models
- Customers are provided unlimited access to the software
- These models enabled effective long-term commitments
Grouping and Rental Models
- With simpler pricing quotes for various groups (by users, by systems, etc.), these models tried to bring cost-effective solutions to customers
- Rental models recorded the usage and billed the required amount to customers