Licensing Trends: Software Vendors vs. Enterprises

While vendors are trying to move customers to term licensing (subscriptions), enterprise customers continue to sing the praises of concurrency due to its cost savings and easier management. According to research by Macrovision, subscriptions or term licensing will be offered by a majority of software vendors for the first time in 2006. By 2007, the forecast is that fully two-thirds of software vendors will offer term licensing even though 57% of enterprises prefer perpetual licensing. Moreover, by better than 2-to-1, enterprises see concurrent licensing as preferred over seat-based licensing. Concurrency is the only licensing model to see an increase in customer preference during the past year, so we are already looking forward to the hallway conversations next year.
In the longer term, utility pricing looks to address the needs of both software vendors and enterprises, but utility pricing is clearly not ready for prime time yet.