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The Dynamics of the NEW Software
Industry: What it Means for Software
Companies
Ken Wasch, President, SIIA
Current State of the Industry
History of Software
• 1950
– Mainframe: IBM
• Mid-1960s
– Mini-computers: DEC, Wang
• 1981
– PCs: IBM, Microsoft, Compaq
• 1995
– The Web
Basic Parameters
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Packaged software
ERP
Simple EULA
Perpetual License
Volume Discounts
Electronic Licenses
ESD
Service/Maintenance
This is all about to change….
What is a Software Company?
The Network exacerbated the
complexity of the Industry.
The direction of the Industry
has shifted.
Evolution
client
server
Network computing
Network computer
Web server
Database server
Application server
A NEW Software Industry
is Being Born!
• New
• New
• New
• New
• New
Models
Ways of Thinking
Companies
Practices
Form Factors
New License Terms……
• New Models…
New Models
ASP: The Predecessor
New Models
Software as a Service:
The Movement
Software as a Service
• Not an ASP
• Clients access services (software)
through a web browser form any webenabled appliance.
• How do you license this kind of
service?
New Models
Web Services:
The Future
New Models
Open Source:
The Disruptor
Open-source to patents
There is a growing tension between
the rise of open-source and the
expanding options for propriety
control
– Open-source’s GPL is at one end of the
IP spectrum
– Patents are the other end
Why?
• Piracy Issues
• Change the Relationship with the
Customer
• Customer Demand
• New Form Factors (Mobile, Handheld)
• New Revenue Opportunities
• What does it mean for Licenses?
• The industry has entered a period in
which it is no longer the technology
itself that is central, but the value it
provides to businesses and
consumers.
Irving Wladawsky-Berger, IBM
The Future of Licensing
• The License Disappears
• Shift to Maintenance and Service
• Non-Perpetual Licenses Costs
• Monthly Subscriptions
• Usage Based
• One-Time Licenses
The Future of Licensing
• Free + Services
• License + Extra Service
• Modularization
• Per User
• Selling across Devices
Current Examples
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Salesforce.com: User-Based
Sun Microsystems: Project Orion
IBM: Utility Computing
Microsoft: LiveMeeting
Microsoft: Software Assurance
Intuit: Product Activation
Things to Consider….
• What works for you?
• Work with the flexibility
• How does it open new avenues?
• What is the TCO?
• How can you shift resources?
• How can you be more dynamic?
Pervasive Computing
When every appliance can be webenabled, communicating seamlessly
with other devices, the shape of the
industry changes drastically,
Ken Wasch
President
Software & Information
Industry Association
+1.202.289.7442
[email protected]
www.siia.net