SafeNet, working with SIIA, has released the results of a survey in which software producers openly admit that they are currently losing nearly 50% of their potential revenues. To what you ask? History may tempt you to say piracy – and the latest stories of organized attacks to steal IP of several US companies only further fuels that belief. But is that the real reason? Not according to the 620 software publishers who responded to the State of Software Monetization survey.

What is so magical about the clock ticking over from December 31^st to January 1^st? What really changes? Your business doesn’t. Your customers don’t. Your action items roll over (unfortunately).  But yet, for most corporations, there is one magical change that happens on January 1: your goals, financial or otherwise, reset! Yes, out with the old, in with the new, just like that.  Like magic, starting every January 1^st, you get the opportunity to be measured differently, to convince your boss why the bad things from last year can be forgotten, and to build on the good things that happened.

I’ve noticed several economic and industry trends heading into the new year, and each one presents unique opportunities for all of us.  These trends will greatly influence the software industry in 2013, and as such, we all should consider how they integrate to our goals: 

Just a few short weeks ago, the US Presidential election was held. No matter your beliefs, the real message the electorate sent to our Government representatives could be summarized in one simple word – “moderation.” When 115 million voters are separated by a mere 3 million, it is fairly obvious that people are done with extremes.

If you think about it, “moderation” is a term that we hear in other contexts as well. Your doctor has probably told you a few times, “It is okay to indulge in (insert your favorite unhealthy diet habit here), as long as you do it in moderation.”  On Halloween night, I could almost hear parents pleading (or, in some cases, demanding) moderation from their children in terms of how much of their candy loot they could consume before they went to bed.

Here is a little secret – I love shopping. Yes, I admit it. I like shopping for clothes, shoes, wines – you name it. But I hate malls, stores, and I especially hate being followed around by a pushy sales rep!! When it comes to shopping, I have my own routine and associated expectations.   I research my options,  look at competitive alternatives (brands), seek a good deal without having to bargain, try to have it shipped to me (if possible), and should I need to return it, I want to be able to ship it back and get a replacement.  My favorite online retailer meets all of my expectations, whether I am buying clothes or shoes for myself, and yes, jewelry for my lovely wife when I have messed up.   This raises the question, why  shouldn’t I enjoy the same experience when it comes to licensing software?

If you live in US or follow the news about US, you know that we are in middle of a political election season. You can’t go a week without watching the back and forth between Presidential candidates over topics that range from relevant to mundane, game-changing to ridiculous. One of the more serious topics (and probably at the top of the voters’ mind) is job creation, or the lack thereof. The US economy is growing but job growth is not keeping pace. At the heart of the issue is productivity: when the chips were down during the peak of recession, most companies learned to be very efficient. That is, they learned how to get more out of the resources they have. One of those efficiencies is increasing use of IT to improve productivity of employees. You could say job growth has given way to use of more software systems and tools.

I have spent much of my last seven years promoting software licensing and monetization. Of course, market dynamics have changed over those years and our solutions and thinking has evolved accordingly. More recently, with the launch of Sentinel Cloud in 2011, we have been very focused on encouraging our customers to start aggressively adopting usage-based models – primarily because their customers – end users – want such pricing schemes.

So, you can probably imagine my reaction as the following story unfolded….

Diehard baseball fans like me have found ourselves at the end of one of the best seasons Major League Baseball has had in years.  What truly distinguished this season is that the old adage of “defense wins titles” didn’t quite pan out. Instead, we got to see teams with ordinary starting pitching somehow make it to the championship games.

Focusing on offense over defense seems to be the trend lately in the software world too.

Here is a term that has made it into our vocabulary a bit too much lately – “wobbly”. Suddenly everything is wobbly – our economy, stock market, jobs market.  The obvious connotation is “uncertainty” but wobbly has also become a cop-out term for not knowing where something is headed. It is a sign of times we are in – or so it feels. Uncertainty in economy leads to uncertainty everywhere else.

My advice – something I try to follow rigorously at work and and personally  – when you are surrounded by uncertainty, do the opposite – be decisive. This is especially true for high tech companies.

I don’t know if they teach this in every MBA program, but I am sure you have heard that every business case can be boiled down to a certain number of “P”s. It is just a question of how many…some have 4 P’s, some have 5; but in this world of Twitter and brevity, I am going to go with the three that matter most when you think about creating licensing approaches for software: Piracy, Portability, and Profitability.