By Victor DeMarines
Any fan of baseball will recall the 2004 Boston Red Sox, the team that finally managed to break the legendary “curse of the Bambino,” on which the team’s spectacular playoff losses up until that point were blamed. Behind the breaking of the curse was a very difficult and locally equal parts unpopular and heartbreaking decision that then-newly appointed GM Theo Epstein made to trade all-star Nomar Garciaparra.
Garciaparra had been a fixture on the team and in the community for a decade—his work ethic, skill, and ritual of un-velcroing and re-velcroing his batting gloves familiar to even the most casual fans. He was good—among the best—but for some reason, the team still couldn’t win the big show. That is until Epstein applied the famed “Moneyball” approach to find the gaps in the team’s defense, bring in two far less famous players—who would prove crucial in the playoffs—to fill in, and trade Garciaparra in the process. The rest, as they say, is history.
The use of analytics in sports has since become table stakes. But back then, bringing these “disciplines” if you will, together, was really something new.
In the product management space, we too are on a similar precipice. We tend to think of the value of usage analytics only in the realm of engineering, marketing, and sometimes, sales. In a separate sphere sits compliance analytics, valuable for legal and sales.
But bringing these disciplines together can be game changing—driving value across the continuum of product development and consumption. Bringing data on software compliance together with data on software usage can lend us the insight that helps us build irresistible products, sell them, and continue to maximize their revenue potential. Here’s how.
Compliance Analytics Vs. Usage Analytics
In grasping how compliance and usage analytics can be used together it helps to take a quick look at their unique properties and consumers.
Compliance analytics give us actionable data to stamp out overt piracy or misuse of our software by leveraging real-time telemetry so we can determine what organizations use the software, where they are located, and the scope of misuse. Compliance professionals, legal, and sales leverage this information as an opportunity to grow the customer base—by either picking off low-hanging fruit with sales-based engagements or lending crucial credibility for more complex, legal engagements.
Software usage analytics lends the development organization detailed information on feature usage and adoption, information that the marketing team can use to create targeted offers and user outreach. Data is anonymous, and the value comes in looking for trends that empower customer-driven product development.
In a way, we can think of compliance analytics as a birds-eye view on where our products are deployed, while usage analytics allows us to zero in on how and why they’re being used in particular ways. While they’re not often viewed as complementary tools, they should be. Here’s what they can do when they work together.
Generate Actionable Leads, Boost Customer Engagement
Want to build CRM systems that every sales person will actually use? Integrate the software for collecting and managing compliance and usage data with your CRM system. When an account manager opens a customer profile he/she will see exactly what the customer is using and detailed information on how they’re using it—with data categorized by product activity, user engagement, and product performance.
By bringing usage and compliance data together and exposing it in a format that is easily consumable by sales we provide a foundation for data-driven conversations about compliance, and evolve an audit into a value-driven partnership.
Perhaps a U.S.-based customer thinks overseas subsidiaries are leveraging software in line with entitlements, when compliance analytics makes it apparent that there is misuse in piracy hotspots like China and Russia. Without an accurate picture of the software landscape the customer can’t optimize usage, ensure efficiencies borne of integration, and of course, exposes itself to enormous risk from security breaches that wreak havoc on brand value.
By coupling compliance data on misuse with usage data on legitimate deployments, the ISV helps bring entitlements into compliance by offering packages that recognize unique usage needs in those particular regions. This not only recovers previously undiscovered revenue, but positions the ISV for upsell and continued partnership.
Evolve and Optimize Licensing Strategies
By 2020, more than 80 percent of ISVs will shift their models from traditional licensing and maintenance and support to subscription-based, according to a November 2015 Gartner post by Christy Pettey Moving to a Software Subscription Model. And close to 50 percent of organizations will have the processes and tools in place to meter usage of their major on-premises software by 2018, according to IDC.
As we look to support subscription-based licensing and perhaps a move to the cloud, we can track how the user leverages the desktop application in collaboration with cloud-based workloads. By combining usage data with data on misuse by geography, we can begin to customize policies that make sense by region.
And as the Internet of Things increases expectations for data access and customers demand more value-added services from their ISVs, more mature purveyors of usage analytics are experimenting with providing usage data to customers. Innovative vendors integrate this data with their account management portals, lending users access to data on key usage metrics in the same space they find billing and administrative information. Leveraging this structure to roll out metered usage-based licensing is the next step.
In all, by increasing options for accessing your software, you decrease the attraction to access it illegally.
Get Proactive on Preventing Piracy
When we look at usage and compliance data holistically, we have better insight into product development strategies that may encourage or lead to piracy.
Many pirates are well-intentioned customers, perhaps looking for legacy functionality or a deal on a newer version. And hackers have become so sophisticated that when users find what they’re looking for, the channel they’re buying through often so closely resembles your own or a partner’s that they think it’s legitimate.
By viewing usage data, and correlating it with factors like region and language, you can better determine how changes in product direction will affect different customers. Perhaps users in Germany leverage a feature planned for sunset much more than users in the U.S. As you drill further, you see that the feature is leveraged by Mac users much more than PC users, and that the usage is in high-value accounts. Armed with detailed information, you can mold product development to drive the best business outcome—either by continuing to support the functionality or crafting targeted offers that will prepare users for the change and encourage upgrades.
Driving a Holistic View
Innovative companies leverage usage and compliance data to differentiate their products, maximize revenue opportunities, and drive value for their customers—and win. SW
Victor DeMarines is the VP of products and strategy at Revulytics.
Aug2017, Software Magazine