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Flexera Software Analyzes Data on New Entitlements, Unveils Subscription Licensing Trends

September 21, 2012
By Rachel Ramsey, Software Licensing Web Editor

Flexera Software's Application Usage Management Benchmarking Report provides insights on the global software industry and the evolving use of increasingly strategic applications. It analyzes anonymized data collected through FlexNet Delivery On-Demand, Flexera Software's on-demand electronic software delivery platform, to gain insights into global application usage trends. Flexera Software's licensing, compliance and entitlement management solutions are used by thousands of software producers and high-tech device manufacturers around the world to deliver software and software updates to millions of customers and to manage software subscriptions and entitlements.

As part of Flexera’s ongoing Application Usage Management Benchmarking Report series, the company analyzed data on new entitlements created in its FlexNet Operations On-Demand service from 2007-2011.

With the exception of 2009, the analysis showed that publishers sell 20 percent of new entitlements each year via subscriptions. On average, a perpetual license is two to three times the cost of an annual subscription license.

Compared to IDC’s Annual Pricing & Licensing Survey for 2009-2011, the percent of publishers not deriving any subscription licensing revenues fell to 20 percent in 2010; or 80 percent of publishers derived at least some portion of their revenues from subscription licensing.

In 2011, the percent of publishers deriving subscription licensing revenues dropped back to 74 percent (100 percent-26 percent) which was similar to 2009 levels. Correlating IDC with FlexNet Operations On-Demand data, Flexera thinks this happened because publishers sold an unusually high number of subscriptions in 2009, which resulted in additional subscription revenues in 2010.

While IDC and other analysts forecast a steady rise of subscription licensing, Flexera’s data shows that publishers seem to be dialing subscription licensing up or down in reaction market factors. The software licensing company views this flexibility as a huge advantage for publishers that can actually pull it off – entitlement management systems like FlexNet Operations On-Demand are indeed the secret sauce that the publishers it serves seem to be leveraging for this flexibility.

FlexNet Operations, the most comprehensive entitlement management solution, empowers software vendors and intelligent device manufacturers to support new revenue models easily and efficiently while streamlining and automating complex back-office processes. FlexNet Operations provides a single, unified view of entitlements for you, your customers and your channel partners.

Earlier this year, the company announced the second installment of its report, which highlighted trends in the software and high-tech device industry. The June report examined the impact of the global recession on the software industry around the world by looking at aggregate levels of software downloads by customers via Flexera Software's FlexNet Delivery on-demand product.

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Edited by Rich Steeves

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