LicensingLive 2018 Live Blog #LLUS2018

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
CEO
| Communications and Technology Blog - Latest news in IP communications, telecom, VoIP, call center & CRM space

LicensingLive 2018 Live Blog #LLUS2018

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For reference - check out the last LicensingLive Live Blog we wrote in 2016.

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It's 9:30 am PST Nov 13th in San Jose and we are about to get started! Check out some tweets we posted last night.


And we are off and running! Jamshed Kahn, VP of Marketing at Gemalto takes the stage!

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"We help companies get more value of your software, regardless of the platform where you offer that software."

Jamshed sets the table on everything we will see today. 

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Shlomo Weiss SVP Software Monetization at Gemalto takes the stage.

He began with a poll - 1/4 of the companies are selling software only - 10% sell hardware and 75% sell both.

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Many companies know they want to get into new markets but the question is - what is the business value a company is offering. Typically it is one or more of these buckets above.

Companies can quite often see a boost of 20% in revenue from effectively monetizing their software. In other cases, companies are seeing they can be losing 30% of revenue through unintentionally excess use by customers. Then there is the ability to generate new revenue via better renewal initiatives, up-selling, cross-selling or trialing software.

One customer in the risk-management space is seeing 20%+ of support calls are related to licensing. In another case, better licensing management has streamlined M&A. Operational efficiency is often improved as well.

Business insights can also be gained - by tracking entitlements a company can see who is renewing - they can better estimate future customer churn.

By offering better customer service options - you keep them happier. they may want to use software or cloud and be able to decide for themselves which is best, when. This could reduce churn 5-10%.

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Ray Wang takes the stage.

Digital business models are winner takes all and everyone is in everyone else's space.

Since 2010 - Dominos was the best-performing stock - blowing away all the tech stocks. The audience tried to guess which company was the leader and all, of course, were wrong.

They have digitally transformed - and this is a great example... If they can do it, everyone can.

This experience after the sale is more important than ever - we buy smaller and smaller slices of products. This is an attention economy. You trade loyalty for convenience and value and you have to earn your customer's business every second.

Investors want a return from your company - meaning minimal dollars left for R&D yet they invest in disruption to destroy your company. It is crazy.

It's all about margins.

How do we break extreme EBIDTA?

The entire business team needs to be involved in DX. 

A nice discussion on new models allowing data to change how we look at software monetization and the entire business operation. Medical equipment - being able to charge for uptime via sensors and service. Customer success management has to be there.

Ray started to explain his favorite IoT example of monetization - a toaster. Few people fill out the warranty card - the first call a manufacturer gets is negative - it's broken or tough to use. The manufacturer has no data and wasting 20 minutes a call.

Now tell people to connect it to internet - they will monitor it, update it and alert you if it is about to break - much more people will now register.

Now you can offer to sell a new toaster for the same price because your toaster is about to break. Most people will take it.

How about toast as a service - if the toaster every breaks they send a new one - 10 cents per month.

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Josh Bloom Simon-Kucher and Partners takes the stage.

Competition is driving pricing pressure and half of companies are involved in a price war while 20% say they aren't engaged but their competition is. 86% say the competitors started it.. 8% say they started it accidentally.

Pricing optimized companies do far better. They do this by launching new and innovative products. They also change the revenue/licensing model.

2/3 of companies are exploring new licensing models.

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Renewal pricing is critical.

Most effective pricing increases are done by determining churn risk and which customers are receiving the most value.

An example was given of a company which was very successful by deeply discounting the first users - sort of freemium plus (our description). After these first users at let's say a dollar per month - subsequent users cost $7 or $8.

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This landing page resulted in 60% increase in sales - they highlight segments and value as you increase to the right.

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By adding flexibility - Nutanix was able to lock competitors out - they needed the systems in place and then they were able to gain more long-term partnerships.

Pricing is controlled differentiation - need to offer more flexible consumption models - Michelin, for example, was able to start charging based on mileage instead of tires.

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QSC is the first customer to come to the stage. TJ Adams Chris Humphrey (left to right)

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The company started as a guitar amplifier company, now they produce much of the equipment for rock and roll market. 

By adopting Intel processors early and not proprietary processor solutions - they were able to embark early on a successful licensing strategy.

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IT is now buying AV equipment - TJ mentioned they are doing to their competition what Cisco did to Avaya and others when they purchased Selsius Systems and moved phone technology from circuit to packet switched.

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They now have an open system via Intel and are using Gemalto to license software.

Their first step was to license features via Gemalto - the competition used entire boxes to achieve this same functionality.

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In March they will be able to license the entire ecosystem together.

They had a huge struggle internally going from hardware to software.

They wanted to be a leader of transforming their industry.

They have already seen an ROI on their first phase.

Fear of unknown was the biggest challenge.

All the cross-functional team came together and people were freaked out.

Gemalto helped guide the team through the journey.

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They are going through a transition from hardware launches to software and customer life-cycle value.

Even the salespeople are on board now - big laughs. applause

Lunch

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Brendan O'Brian, Chief Innovation Officer and a Co-founder, Aria Systems

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Consumers are moving to subscription models such as Dollar Shave Club, etc.

"All revenue aspires to be recurring in nature."

From every viewpoint - companies are gravitating towards an ongoing, tethered relationship.

Monolithic legacy devices were not built to handle this.

Billing systems must be:

  • Rhythmic
  • Automated
  • Variability Tolerant
  • Change Tolerant 
  • Exception Tolerant
This is the same as licensing systems - same bullets.

Recurring systems focus on retention - focus on ensuring customers are satisfied.

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Billing and licensing are tightly tied. There needs to be a feedback loop - "usage mediation."

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Dale Hopkinson Sr. Product Manager, Cloud Services Gemalto takes the stage

Innovation, speed and agility are crucial.

Innovation doesn't always mean speed but you must be in the position to respond to market conditions as needed.

Time to value is an important metric to measure.

You must move from transactional value to relational value. 

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You must be able to pivot to meet their needs.

It all comes down to customer experience and CLTV or customer lifetime value.

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We used to all communicate over the intranet - now he used an example of three customers in different countries on the same slack channel which boosts agility.

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We need a high level of customer satisfaction and to do this you must have data.

The more you can focus on your business, the more agile you can be!

Licensing solutions reduce time to revenue.

3 PM PST - we are in the home stretch

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Liam Kiely, VP Technology and Strategy, Extreme Networks

How do you get executive buy-in?

He leads Business Transformation for product management. 

There was some level of understanding what licensing was.

It belonged to nobody - this was a big problem for them.

Everyone was involved but no one with ownership.

They had lots of products consolidated via M&A. 

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Engineers had their own license solutions - they moved according to their own requirements.

It was time to consolidate resources.

Hardware differentiation was gone but their R&D didn't catch up with that. They had to shift from hardware to software and move from perpetual to recurring licensing.

"What does your board and CEO/CFO care about?"

If you don't know - see what they are saying in quarterly conference calls and align your priorities accordingly.

Connect your project to what is strategic and fundamental to the company.

How will your project help meet shareholder objectives?

You must start top down and make sure stakeholders understand why this is good for them AND the company.

Create a project vision with broad appeal - leverage early success and add-on over time.

Other divisions had pet projects as well they wanted to get funded first. They have to have bought in. Stakeholders need to know what the plan is and how it will work. They have a habit of hearing what they want to hear.

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Dana Whitmore Software Supply Chain Strategy team leader at HPE takes the stage. She is the "Fairy godmother of software licensing."

She discussed the mergers and spin-offs and how the company is now wary of acquisitions and spin-offs.

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They have a massive line of products!

They had an opportunity and challenge as they spun off. We were a company of engineers without UE experience. They didn't have adequate customer feedback. They knew they were investing a lot of money in trying to raise customer experience - they subsequently designed in closed-loop feedback.

They now survey frequently and look at open-ended and multiple-choice questions - customers will tell you in glorious detail what the problems are. They will tell you what the problems are - the issues with flow and products which don't work well.

Their team looks at this data monthly. You need people who aren't so close to the system and process to look at this data with you as it's your baby and people are telling you it is ugly.

Other departments can spot why some of the problems exist - it pays to have a team look at the data regularly.

They want to see if they are getting better or worse. 

They can also spot problems.

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They do two types of surveys.

Experience surveys help determine how well you're doing. Is our software tough to use? If even one customer says this, you have some work to do.

They made a change from SKUs to product names. They focused on 360-degree view on entitlements - they can now show customers what they own. 

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When you make any big change - it will take a while for customers to get back on their feet. A dip will happen - perhaps over and over again. Make sure executives are aware.

Customers really helped them with debugging. With 8 weeks of 24x7 they worked out of the dip.

Customers can also give you glimmers of hope.

When customers like something - it can be good for employee morale.

They are now working on simplifying their portals - allowing continuity across products... It will take a few years.


Now that they are smaller and more focused they are working to be as lean and efficient as they can be. Customer sat is at 87% in software now. Firmware updates are still an issue and their corporate transformation will help improve the supply chain.

They are moving attribute-based product models. In other words, no SKUs... Product will be described. "In software, why do you need a SKU?"

They will consolidate software updates into the portal, implement subscription and consumption models and optimize the software supply chain.

"Don't annoy customers with surveys unless you are going to act on the data."

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This helps them tell execs what customers want and adjust as needed - including getting funding.

There is always more that can be done - if customers ask you to do something then prioritize it.

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Patty Cavers Director Enterprise Applications Aviat Networks.

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As I move from monetizing software - I put more effort on the customer... When things get split to new SKUs - more complexity is added. The question is how to make it simple for customers.

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Upgrades took a long while before Gemalto.

They had to remember all the systems and pieces - different departments needed to coordinate. Took weeks to test and roll out changes. No one owned it or was motivated to change.

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Things were manual - even for small and simple things which should "fly out the door."

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New product was launched - had to be low cost. Simple to order. 


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These specs were handed to Gemalto. Ease of use and adaptable for the future.

Has to be efficient and profitable - flexible and robust. The system has to adjust when course-correction required.

Internal and customer unknowns need to be handled.

"If we can present to the customer at the end of the day what licenses they own - they then have more information about their network."

They need simple SKUs and be able to bundle them and make them simpler for the customer.

There needs to be a single portal for the customer - full interface into ERP so it's hands off.

Customers have the need for bulk license entitlement - over 100 requirements.

They needed a system to help them on the journey.

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IT said they can do it internally - it would take a few weeks.

They finally realized every change could take weeks and this was not their core competency.

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Customers can order online - it is not fully automated yet. License-only orders can be fulfilled in hours.

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Customers can now upgrade their licenses and their engineers can focus on the product.

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Customers aren't all happy because they don't want to do the work. Aviat can do this for them.

If they can find a way for customers to manage licensing without work it would be ideal.

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Ruthless automation is the future.

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Rich Roll, Plantpowered Wellness Advocate, Bestselling Author, Ultra-Athlete & Podcast Host takes the stage.

Rich does not know if his home is standing - he left his home with only the shirt on his back. He started to tell us home is not a house but community.

20 years ago he was an alcoholic about to die.

He had a moment of clarity which landed him in rehab.

He was in rehab for 100 days and they told him if he didn't change he would die.

They told him he must surrender; He needs to change just one thing... Everything.

He discovered a 320-mile Ultraman iron-man triathlon over three days. He decided to do it.

He won as fastest American and sixth in the world - he was ahead in the first leg and had a bike crash.

He also did it without animal products (vegan) - he was told this was likely not possible.

Then he did five IronMans in just over five days.

He received lots of media attention and wrote Finding Ultra.


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He then discussed his home and if he will be OK if his home is gone. He said the experiences we have and giving services freely to other people is what life is about.

"It's like a superpower - a detachment from the results of your efforts - it's about connecting to what is important to you."

Can you find that within yourself that makes you embrace the day and can you share that? And can you be removed from the results of your actions?

I think we all have greatness in ourselves. Something unique and special yearning to be more fully expressed.

If my story stands for anything it is we are all sitting on top of vast reservoirs of potential.

Our mission is to find that song and sing it.


Jamshed came back on stage to wrap up - it was an amazing conference about how companies are transforming themselves to find new and lasting ways to generate revenue and stay relevant to customer needs.


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