With the advent of cloud technology, I see a tremendous change in the mindset of Indian businessman and the way software licensing works for the businesses. In 2010 when we included Microsoft Licensing as one of our offerings at Bitscape Infotech Pvt. Ltd., selling software licenses to businesses, especially in SME space, was way different and difficult – primary reasons being the myths and wrong information the customers had that cost millions of dollars in mis-licensing to businesses especially the one who are small to mid-sized.
As we engaged further in the India market, I realised that business owners do not have awareness on the serious issues they may have to face due to their ignorance in understanding licensing complexity for software they use. I vividly recall one of our early customers – an OEM manufacturer to a global automobile company, was not aware that it may be banned from exporting to the global automobile company’s country if someone complained about its use of illegal or pirated software, whether knowingly or unknowingly. Timely exposure to the right information led to quick action from our customer as it reviewed complete details of SAM services to identify US$150K worth licensing compliance GAP, which the OEM manufacturer choose to close the same day to ensure software compliance for its business.
This was a potentially disastrous story gone right due to timely action and compliance. But, not all SMEs have cash flow to support such situation. Even as number of data breaches and cyberattacks rise, the piracy level in India remains at 60 per cent with a whopping $2.9 billion worth of unlicensed software being installed (source: BSA). The good news is that we witnessed a marginal decline in piracy level from 63 per cent in 2011 to 60 per cent in 2013. A study by IDC indicates that Indian mid-size manufacturers, especially those who export goods, stand to lose much more from malicious programs and penalties for lack of compliance when they use pirated software, than they can potentially save by not paying for a licensed version. As per this study, the potential export loss of Indian firms using non-licensed software stands at $35 and savings by use of pirated software stand at $0.84 million – indeed reflective of the net loss that an organization signs up for by using pirated software!
The cloud twist to the licensing story – changing the game
In 5 years of my experience of working as a trusted licensing advisor I realised that the problem of licensing complexity is not unique to Microsoft; it is endemic to the entire enterprise software industry and can easily be simplified by software vendors with required competency in licensing solutions. But most importantly, Cloud has brought the real twist and turns in the licensing nightmares of businesses. It’s changing the game with:
- The revolutionary SaaS- Service based software system
- Awareness and ease of managing software compliance
- Lesser investment and also cost-cutting on software operations
Moving to cloud and SaaS-based software means paying for the use and pay when you need to use. Today, I need not buy a Harley to ride it, I can always hire it when I am in the mood to adventure, so the very idea of paying when you need is a boon, as it straight cuts the investment aspect. This means, for less than 100 employee shop, you can get rid of complex IT management and for large organization, less CAPEX but only OPEX is what you need to focus on, which also helps ensure software compliance. If you don’t pay for subscription service is turned off like your TV subscription of channels. Furthermore this mean, no lawyers to deal with, no compliance headaches and no unplanned sudden compliance expenses.
Not all software you use today available on subscription model but with the announcement of Windows 10 as subscription option and most popular office suite already available on software as services or rental model, Indian SMB and enterprises are equally equipped to ensure 100% compliance to their software usage.
I personally foresee a cloud empowered digital Indian economy which will flourish by being more productive and being in compliance without the need to hire someone to help explain the complex licensing terms of licensing vendors. Cloud has not just changed the mindsets of millions but also transforming the economy as the way it brings down the expenses on software is truly dynamic, and is picking the dominant role in Indian digital economy boom, taking it higher and ahead.
Kartik Shah – CEO and Managing Director
Bitscape Infotech Pvt. Ltd.
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