André Bakken

Macrovision

Senior Product Manager

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Speaker

Five Best Practices for Streamlining Licensing Operations

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IMAGINE…IMAGINE…

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AGENDAAGENDA

Operational Challenges

5 Best Practices

Case Studies

Why Automate Your Operations Applications

Q & A

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INEFFICIENT LICENSING OPERATIONS NEGATIVELY INEFFICIENT LICENSING OPERATIONS NEGATIVELY IMPACTS VALUE CHAINIMPACTS VALUE CHAIN

“It takes too many steps to generate licenses for

orders”

“I handle too many support calls for incorrect keys and license changes”

“Supporting new packaging, pricing, promos, demosrequire costly customizations”

“I could sell more if our packaging & pricing was more flexible…or If I could do more demos.”

“I cannot introduce new pricing,packaging, demos,promotions because our systems &operations are inflexible”

How do I streamline operations to cost-effectively respond to business and end

user needs?

VPOperations

Marketing

Sales

Customer Support

Fulfillment

InsideSalesIT

60% of software vendors made licensing changes in 2003*

60% of software vendors are considering changes in 2004*

33% of software vendors that made licensing changes in 2003 are considering changes in 2004 as well*

* Source: IDC’s Future of Software Licensing Study, 2004

“I think I’m losing money on renewals & upgrades because

I don’t know when licenses expire or what product version a customer is on”

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VPOperations

INEFFICIENT LICENSING OPERATIONS NEGATIVELY INEFFICIENT LICENSING OPERATIONS NEGATIVELY IMPACTS PROFITABILITYIMPACTS PROFITABILITY

Sources: (1) McKinsey & Co (2) “Technical Support Cost Ratios”, Soft Letter & The Association of Support Professionals (3) Macrovision customer surveys

InsideSales

5-10% missed renewal & upgrade

revenues(3)

Customer Support

$36 per licensing

related support call(2)

…lost keys…incorrect

keys…license changes

Fulfillment

1-2% of gross

revenues spent …in

product fulfillment & generatinglicenses(3)

Marketing

Sales

5-10 percentage points lower profits (1) …inflexible pricing & packaging

IT0.1-0.3% of gross revenues to customize

inflexiblesystems(3)

…to keep up with new pricing/packaging

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INEFFICIENCIES RESULT FROM BROKEN LICENSE INEFFICIENCIES RESULT FROM BROKEN LICENSE LIFECYCLE PROCESSESLIFECYCLE PROCESSES

License Lifecycle

2. Lack of ERP/CRM integration

…manually entering order information to create licenses---time consuming & error prone

3. Poor design of install & activation experience…multiple installations & keys…error-prone user inputs (e.g. what is a HOSTID? Where is it?)

5. Manual trackingof installed base

…for upsells andrenewals

4. Lack of self-service…for license and entitlement changes

1. Inflexible systems…for handling new packaging

or pricing

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AGENDAAGENDA

Operational Challenges

5 Best Practices

Case Studies

Why Automate Your Operations Application

Q & A

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1.1. Ensure Change-ReadinessEnsure Change-Readiness

• Assume license changes are inevitable

• Expect changes on a continuous basis

• Operational applications must be flexible for changes in• Business requirements

• Promotions

• Marketing campaigns

• New products

• Licensing Processes

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2. Automate Handoffs 2. Automate Handoffs

• Eliminate manual handoffs between ERP & CRM applications

• Integrate you Operations Application into ERP & CRP applications

• Minimize impacts along value chain• Sales Operations

• Order Entry

• Fulfillment

• Product Management

• Marketing

• Operations

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3. Enable self-service3. Enable self-service

Create usable web interface for license support activities– Track & Manage

Entitlements– Renewals– Returns – Rehosts – Merge

Help customers – Track what they bought– Stay in compliance

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4. Make licensing invisible4. Make licensing invisible

Create an end-user experience that enables “hands-free” license activation– End users should not

know about licenses– Customers just want to

order, install and use– Turn on software without

customers knowing they received a license

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5. Track license & entitlement histories5. Track license & entitlement histories

• As licenses generate, accumulate & report on customer purchases • What versions customers

actually install?

• Which customers have Product A, version 6.5?

• Which platforms are most in use?

• What have they bought vs. what have they installed?

• Maximize revenues from renewals and upgrades

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AGENDAAGENDA

Operational Challenges

5 Best Practices

Case Studies

Why Automate Your Operations Application

Q & A

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OPERATIONS MODULE ENABLES WEB OPERATIONS MODULE ENABLES WEB BASED SELF-SERVICEBASED SELF-SERVICE

Self-service for end users and channel partners to:

• View entitlements• Activate licenses• Manage license

changes• Returns• Rehosts

• Manage entitlement changes

• Transfers• Splits• Merges

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TRACK AND AUTOMATE TRACK AND AUTOMATE RENEWALS AND UPGRADESRENEWALS AND UPGRADES

• Track expiring licenses:– by date– by customer,– by product &

version• Automate renewal

and upgrade processes

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macromedia MAKING LICENSING INVISIBLEmacromedia MAKING LICENSING INVISIBLE

Publisher

Enterprise Customer

Software

Operations Application

Activation request

License

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CASE STUDYCASE STUDY

Business Challenge

Streamline electronic licensing operations while…

…supporting channel-centric selling model…

for Internet appliance and Network Management software

Solution

Operations Module automates license lifecycle processes: Demo/Evals Synchronizes orders from SAP Web self-service activation,

return/rehost of licenses

Automates upgrade e.g. more seats for same product

Synchronizes Vantive (CRM) installed base

Benefits

Minimize costs:

–license activation costs via self-service & SAP integration

–support costs for return/rehosts via self service

–IT costs to adapt systems and processes Maximize revenues:

– by pricing and packaging what customers want to buy

–upgrade revenue (e.g more seats of same product)

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HOW IT WORKSHOW IT WORKS

FLEXnetPublisher

Operations Module

Installed base records

Orders

Self-service

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VPOperations

Marketing

Sales

Customer Support

Fulfillment

InsideSales

IT

SELECT CUSTOMERS WHO AUTOMATE OPERATIONSSELECT CUSTOMERS WHO AUTOMATE OPERATIONS

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AGENDAAGENDA

Operational Challenges

5 Best Practices

Case Studies

Why Automate Your Operations Application?

Q & A

2121

Cost savings

Upsell & Renewal revenues

LOWER IT COSTS & INCREASE PRODUCT LOWER IT COSTS & INCREASE PRODUCT REVENUESREVENUES

Financial BenefitCapabilities

Bottom Line Impact

Fulfillment costs

Support costs

Track upsells and renewals

InsideSales

IT costs Current Costs

Reduced Costs

Revenues from new packages

One stop solution –maximize revenues from & lower costs for changing packaging/licensing

IT

Sales, Marketing

Automate 100% of license lifecycle (activate, return/rehost, update, upsell/renew)

Fulfillment, Support

Support

Fulfillment

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OPERATIONS APPLICATION: STREAMLINED & OPERATIONS APPLICATION: STREAMLINED & SYNCHRONIZED. SYNCHRONIZED.

VPOperations

Marketing

Sales

Customer Support

Fulfillment

InsideSales

IT

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IMAGINE…Complete!IMAGINE…Complete!

Accomplished: – 30 Products in 30

Days

Go home early:– Have fun!