Prepaid software: More than a token solution to licensing woes

Prepaid software: More than a token solution to licensing woes

Software licensing's third way offers flexibility and savings -- not to mention a stronger bond between seller and buyer

Benefits of tokens

While simple in concept, say Bill Polk and Allison Smith, research directors at AMR Research, the model allows for fairly complex purchasing scenarios. In addition, companies have the flexibility to expense or capitalize the software acquisition.

Also very appealing, the token model has less waste, say Smith and Polk.

Of course, it is better suited to some industries than others. For example, the token-based model is ideal for applications used on the design side as part of a project rather than, say, an AutoCAD solution that is used all day, every day.

The solution also helps a company track the usage of its applications better, adds Tom Fiske, senior analyst of automation & supply chain at ARC Advisory Group. Actually, Aspen Technology by necessity does that for you.

Like SaaS, there are advantages for the vendor as well, in terms of leveraging its installed based, Fiske notes. Any company with a large portfolio of products may have difficulty getting users to try other items. The token model allows companies to try something for far less investment than the traditional model.

Wheeler says Aspen Technology's customer base likes the token model, and he is proud to tell me that from Aspen Technology's perspective, they are putting their money where their mouth is. Aspen could probably sell more using the traditional model, but by not ripping off the customer, there's a stronger bond between seller and buyer.

From the complaints I hear on almost a daily basis from IT buyers of enterprise software, it sounds like an advantage that, although intangible, will probably produce the most benefit of all.

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