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SPA focuses on volume licenses

The SPA is exploring whether electronic licensing can simplify volume licensing for buying organizations.

Aiming to make life easier for corporate software buyers, the Software Publishers Association is exploring whether technology can simplify volume licensing for buying organizations.

A new white paper by the trade group details differing approaches by software publishers and points to areas where technology could ease headaches for corporate buyers who deal with several publishers. But antitrust concerns put anything related to prices off-limits in the discussions.

"We see a real Microsoft profits from license changes need, especially from customers to start purchasing software over the Internet," said Steven Walter, of IBM's Lotus division, where 80 percent of revenues come through its volume licensing program.

"We tried to take a big-picture view at what volume licensing programs look like today, the generic workflow process that is involved today, and to look at technology providers for electronic licensing solutions," added Walter, who was also project architect of the working group that created the white paper.

Large corporations license software based on the number of users from a variety of publishers, but different licensing terms and structures can be problematic for corporate buyers.

IS administrators may not even know all the software running on different machines within the corporation--some could be pirated and some might be cheaper if internal buyers consolidated their purchases into one license.

The SPA's effort, and work by various technology vendors, aims to automate licensing to make it faster and cheaper--a volume license that might take ten days to handle by phone, fax, and paper licenses might be completed electronically in 48 hours, for example. The SPA has published position papers on other issues in selling software over the Net as well.

The report presents case studies of volume licensing programs from Lotus, Adobe Systems, Wall Data, and others. It examines online licensing technology from BITSource and Preview Systems, and covers the practices of major distributors and corporate resellers, including Tech Data, NECX, and Beyond.com, formerly Software.net.

Fran Foster, who staffs the SPA's Internet section, said the next phase will involve focus groups with customers.

"We're hoping to find from end users what aspects of the programs can be used as best practices or guidelines," Foster said.

Industry analyst Jeffrey Tarter is skeptical. "Customers have complained about these different methods for a long time, but I'm not sure that the polite collusion among vendors is the solution," said Tarter, editor and publisher of industry newsletter SoftLetter.

"For all the complexity, the real issue is how the customer buys additional copies under price schedules, and that's enormously tricky," Tarter added. "The back and forth to get those additional licenses is just a nightmare."

He called distributing volume licenses electronically rather than on paper "a beautiful answer," noting that electronic orders could be routed automatically from buyers to resellers to publishers.

"That's the nirvana here, but obviously we're not all hooked up the right way to let that happen," he added.

Wallace of Lotus noted that corporate customers are moving toward electronic purchasing by implementing systems from SAP, Ariba, and others.

Rich Kline, director of publisher relations for technology vendor BITSource and a participant on the SPA volume licensing task force, doubts publishers will ever standardize their programs.

"Our value-add is to build all the practices into all the programs the way they want them on the Internet--aggregating information on online licensing giving users a statement of what they own," said Kline. BITSource today announced that Corel has authorized it to sell and deliver electronic volume licenses. BITSource has similar deals with Symantec, Qualcomm, and Verity, among others.

Denise Sangster, chief executive of consulting firm Global Touch, notes that online licenses open the way for resellers or publishers to provide additional services such as maintenance, systematic upgrades for new versions, and customized bundles for specific customers.

"We are in a shift of relationships," she said, referring to the roles of publishers, resellers, distributors, and end users. "It's much more important than how software is delivered."