Luke Hohmann, Enthiosys CEO, on the many ways to match customer value to software pricing and value exchange mechanisms. How can we match what customers need with appropriate models and units?

1. Aligning Business Models and Technology Architectures Luke Hohmann CEO, Enthiosys Feb 27, 2008

16. A Smattering of Examples... Transaction Fee: Flat or % of some defined txn Visa, BEA (when used in an ASP) Perpetual License: Upfront fee + 15-22% annual maintenance ERP Annual License: Yearly License, must be renewed ERP, MSFT Per-user, Concurrent, & Named User ERP Per-CPU (Hardware) MSFT, Oracle, BEA Service (subscriptions) Anti-Virus, AOL Consumables (Meter) Printers (ink, paper)

20. Licensing Terms and Conditions of Use

23. SoftCo Software License License Term Meaning Grant of License: non-exclusive non-assignable, non-transferable USE SoftCo grants the purchaser (licensee) the right to use the software, and licensee cannot give or sell it to anyone else. SoftCo can continue to license the same software to anyone they want to Ownership of Software SoftCo owns the actual software that is licensed to the purchaser. Copy Restrictions The only copy of the software that the licensee can make is for backup purposes. Use Restrictions Licensee cannot distribute the software. Licensee cannot crack software or derive new IP from it. Assignment and Transfer Restrictions Licensee cannot sell or give the Grant of License to anyone else without SoftCo’s permission. If SoftCo does grant permission, the new licensee is bound by the original license

24. SoftCo Software License License Term Meaning Termination License is in force until terminated by SoftCo. When terminated, licensee shall destroy or return the software and media. Update Policy Reinforces SoftCo’s ownership of the software. SoftCo can change the software anytime without having to notify the licensee or granting use of the new software to the licensee. Export Law Licensee must abide by applicable export laws. Confidentiality Complex expression that tries to protect SoftCo’s IP contained within the software. Disclaimers of warranty and Liability Litigation attorney’s requirements. Releases SoftCo from ANY AND ALL CONCEIVEABLE FORMS OF HARM TO THE LICENSEE IN ALL WAYS AND FOREVER. 

29. Enforcement Protection of Rights

33. SW License Manager Basics Protect “ Server” License Manager License Generator Embedded License Manager License

34. HW License Manager Basics Protect “ Server” License Manager License Generator Embedded License Manager Strong protection: a) Software and license on key b) Must have physical token to run! License

35. SW License Manager Attacks Protect “ Server” License Manager License Generator Embedded License Manager License

36. HW License Manager Attacks Protect License Generator Embedded License Manager “ Server” License Manager License

38. Projected Total Cost over Solution Lifetime Development cost based on US Bureau of Labor Statistics mean salary for computer software engineers. Lost opportunity cost based on Software Magazine , "Software 500“: Average Revenue/Employee (2007). Total cost of ownership based on Gartner Research estimate of $3.40 lifetime costs for every dollar invested in initial development.