Are Application

Producers in

“Climate Change” Denial?

A Report by

Contents Introduction ...... 3 Part 1: Evidence of Business “Climate Change” – Environmental Risk Factors Posing for Producers ...... 3 Opportunities and Risk of Emerging Technologies...... 3 What Impact Will IoT, Cloud, Virtualization and Mobile Have on Producers’ Climate Change Readiness?...... 5 Shifting Customer Demand Creates Instability in Producers’ Revenue Models ...... 9 Enterprise Customers’ Tech Environments Are Also Shifting ...... 11 Ignoring the Signs of Business Climate Change, Producers Are Not Adequately Managing Customer Licenses and their Software Entitlements ...... 13 Likewise Ignoring the Signals, Producers also are Not Adequately Automating License Management ...... 14 Part 2: Impact of Business “Climate Change” on Producers ...... 16 Climate Change is Contributing to Non-Compliance, Contributing to Revenue Leakage...... 16 Software Company Mergers & Acquisitions, Create Disruption for Customers ...... 18 Producers Report Wide Array of Business Climate Challenges ...... 20 Producers Are Lagging in Offering Flexible Software Monetization Options ...... 21 Conclusion ...... 23 Infographic ...... 24 Survey Background ...... 25 Methodology and Sampling ...... 25 Survey Demographics ...... 25 Location of Respondents ...... 25 Respondents’ Vertical Market ...... 26 About Flexera Software ...... 29

Are Application Producers in “Climate Change” Denial? – Page 2

Are Application Producers in “Climate Change” Denial? A Report by Flexera Software

Introduction The environment in which application producers create, sell and manage their software is in a state of dramatic and accelerating change. Survival for these producers experiencing this business “climate change” depends upon their ability to read the writing on the wall and address these challenges head-on. To thrive in a dramatically different business climate means adapting business models and operations accordingly, and applying best-in-class people, processes and technology.

For producers – business operations revolve around Software Monetization. How do producers adapt to changing technology environments, license their software to maximize profits, protect their and keep customers happy amidst the whirlwind of constant and buffeting change?

This report examines the new and emerging technology trends that are having the greatest climate change impact on application producers, the struggles they’re facing in the face of software climate change, and some solutions that could make a difference for those producers ready, willing and able to adapt.

Part 1: Evidence of Business “Climate Change” – Environmental Risk Factors Posing for Producers

Opportunities and Risk of Emerging Technologies

Preparedness is a measure of assessing opportunity and risk, and then acting on the best information. The impact of new technologies is an essential element of this measurement. At a strategic level then, a good leading indicator of business climate change preparedness can be gleaned by examining the trends and technologies in which producers currently see opportunity and risk. We asked respondents to consider the benefit and risk of a host of emerging technology trends that are being widely discussed today. In terms of opportunities – It should not be surprising that producers see the greatest potential in such categories as providing mobile applications (51 percent), supporting virtualization (45

Are Application Producers in “Climate Change” Denial? – Page 3

percent), offering subscription based licensing (43 percent), embracing public (41 percent) and the (IoT) (37 percent), to name a