Three-Quarters of Software Publishers Will Head to the Cloud in Search of New Revenue

BALTIMORE, May 7, 2013 /PRNewswire/ -- Software monetization market leader SafeNet, Inc. and the Software & Information Industry Association (SIIA) today released additional results of a joint survey of more than 600 software developers and 200 enterprise software end users, revealing current trends, adoption rates and drivers of cloud-based software delivery.

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Key Findings:

• Three-quarters of software publishers plan to be in the cloud by the end of 2013; hybrid models expected to dominate through 2017
• More than half of software publishers expect operating costs to decline once in the cloud; 25 percent still cite cost and complexity as the biggest barriers to entry
• Thirty-five percent of enterprise end users cite inflexible licensing as the top software consumption headache; close to half of software publishers expect to improve end-user experience with cloud

Cloud Adoption Trends

Today, 65 percent of software publishers report offering all or a portion of their portfolios as a cloud service, and on average, cloud services comprise 24 percent of a typical company's software portfolio. Though approximately one-third of software publishers have yet to offer cloud-based services, 75 percent of the respondents have plans to offer at least some of their product portfolios as a service in the next year. Of those with mixed portfolios (i.e., both cloud and non-cloud offerings), the percentage of cloud offerings is expected to remain steady at 25 percent. During the next five years, the survey indicates that the cloud will continue to grow as a percentage of overall portfolios for publishers, even though the number of publishers with no cloud presence will remain steady at 25 percent.

"Cloud-based software delivery is attractive to software publishers and end users alike, most often because of the promise of increased transparency, more flexible business models and perceived operational simplicity," said Michelle Nerlinger, Vice President at SafeNet. "The ability to reap these benefits is strongly dependent on a software publisher's ability to effectively track, control and manage their applications in an automated and operationally effective manner. This means that the implementation of effective licensing and entitlement management techniques will be key to achieving software monetization success in the cloud. For transitioning or hybrid software publishers, a platform capable of managing on-premise and cloud applications in tandem will be absolutely critical."

Understanding Publisher and End-User Adoption Drivers

The most common driver for software publishers to offer cloud-based services is to reduce the operational costs associated with product delivery, activation and support (cited by 62 percent of respondents). Additional motives include improving customer experience by "reducing end-user headaches" (46 percent); the ability to access new and niche markets (48 percent); improved usage tracking (33 percent); and faster time to market (32 percent).

Sixty-one percent of software publishers that have already adopted a cloud-based software delivery approach confirm the validity of these expectations by reporting a positive financial impact, due to reduced operations costs or increased revenue. Reinforcing that, only six percent of respondents reported a negative financial impact or security threat once introducing cloud-based software delivery.

Software publishers are not alone in their desire for the flexibility and transparency promised by cloud-based software delivery. Thirty-five percent of enterprise end users reported inflexible licenses that don't meet organizational needs as the number one headache related to software consumption. In addition, 14 percent of enterprise end users cited cloud-based services as their top software licensing model preference, and 16 percent specifically identified a metered billing method as their preferred pricing model.

"At the SIIA, we're watching with great interest how cloud-based software delivery has changed and continues to change over time," said Rhianna Collier, Vice President of the SIIA's Software Division. "We're expecting to see a rise in the adoption of software-as-a-service as developers and users alike look to take advantage of the benefits that the cloud can offer."

Obstacles to Adoption

More than half (55 percent) of software developers do not see their organizations as "cloud-ready," with security concerns about data in the cloud (36 percent), and the perceived cost and complexity of the transition from on-premise (25 percent) being cited as the biggest obstacles to true cloud readiness. On average, respondents said it would take 16 months to make all or a portion of their product portfolio cloud-ready; however, 26 percent of respondents believed that they could never move their offerings to the cloud.

Additional Resources:

To learn more about the full survey, download a copy of the SafeNet and SIIA State of Software Monetization Executive Summary at www.safenet-inc.com/softwaremonetizationmatters.

• Video Case Study: Supplementing Your Core Business With a Services-based Product Offering
• Join the LicensingLive! Software Monetization Community
• Learn more about Software Monetization in the Cloud
• Follow SafeNet on Twitter, Facebook, YouTube, and LinkedIn
• Follow SIIA on Twitter, Facebook, YouTube, and LinkedIn

About SafeNet Software Monetization Solutions

SafeNet has more than 25 years of experience in delivering innovative and reliable software licensing and entitlement management solutions to software publishers, technology vendors, and cloud service providers worldwide.

Easy to integrate and use, innovative, and feature focused, the company's family of Sentinel® Software Monetization Solutions are designed to meet the unique license enablement, enforcement, and management requirements of any organization, regardless of size, technical requirements, or organizational structure. SafeNet clients are able to address each and every aspect of the software monetization lifecycle—from copy and intellectual property protection to product catalog management and ongoing end-user experience improvement.

With a proven history of adapting to new requirements and introducing new technologies to address evolving market conditions, SafeNet's more than 25,000 customers around the globe know that by choosing Sentinel, they choose the freedom to evolve how they do business today, tomorrow, and beyond.

About SIIA

The Software & Information Industry Association (SIIA) is the principal trade association for the software and digital content industry. SIIA provides global services in government relations, business development, corporate education, and intellectual property protection to more than 500 leading software and information companies. For further information, visit www.siia.net.

About SafeNet

Founded in 1983, SafeNet, Inc. is one of the largest information security companies in the world, and is trusted to protect the most sensitive data for market-leading organizations around the globe. SafeNet's data-centric approach focuses on the protection of high-value information throughout its lifecycle, from the data center to the cloud. More than 25,000 customers across commercial enterprises and government agencies trust SafeNet to protect and control access to sensitive data, manage risk, ensure compliance, and secure virtual and cloud environments.

SOURCE SafeNet, Inc.