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Second Annual Software Licensing Study Shows Compliance a Major Challenge for Enterprises

72% of Enterprises Manually Track License Compliance or Do Not Track It at All

SANTA CLARA, Calif. (SoftSummit 2005) - October 10, 2005 The second annual study on software pricing and licensing trends released today reveals that compliance with software license agreements is a major challenge for enterprises increasingly faced with regulatory pressures in the post Sarbanes-Oxley era. The report, "Key Trends in Software Pricing and Licensing," found that 72% of enterprises manually or do not track license compliance at all and that half of companies today want their licensing automatically enforced.

The study was sponsored by the Software & Information Industry Association (SIIA), Centralized Electronic Licensing User Group (CELUG), and Macrovision Corporation (Nasdaq: MVSN), host and sponsor of the SoftSummit 2005 Conference being held this week in Santa Clara, Calif. The results of the study were officially unveiled during a keynote presentation today at SoftSummit by Macrovision CEO Fred Amoroso.

The study's key findings include:

  • License Compliance Is a Large Problem That Enterprises Want Solved. 72% of enterprises manually track license compliance or don't track it at all. Since manual methods tend to be error-ridden and non-scalable in large enterprises, a large number of enterprises are likely to be out of compliance with their vendors. Enterprises are showing an increasing preference for digital licensing methods. Half of companies today want their licensing automatically enforced, an increase of 6% over last year's data.
  • ISVs and enterprises lack alignment on licensing policy satisfaction. Although more than two-thirds of software vendors have changed their pricing and/or licensing policies during the past two years, and 57% say they are satisfied with those policies, only 28% of enterprises say they are satisfied with their vendors' pricing and licensing strategies.
  • Software vendors and enterprises continue to move toward subscription-based business models. The number of vendors offering subscription models as their primary pricing method has risen to 40% this year, an increase of 7% over the previous year's survey. By 2007, that number is expected to reach 60%. Similarly, the number of enterprises who prefer to purchase software through subscriptions increased 7% to 43%, showing increased interest from customers.
  • Both enterprises and vendors have made a significant move towards concurrent and away from per machine/per server licensing. The preference in enterprises for concurrent licensing has grown by 11% in the last year to 53%, while the preference for traditional per machine/server licensing dropped by 7%. Among ISVs, there was a 16% decrease in the prevalence of the per machine/server model. Metric-based licensing is expected to reach almost 40% among vendors by 2007.
  • Processor-based licensing is not taking hold. The multi-core processing debate has been an important issue over the past year. Despite some large vendors' aggressive efforts to license per processor, only 6% of enterprises prefer this kind of licensing.
  • Product activation and network licensing are becoming the most prevalent license models. Software vendors continue to move away from older licensing models such as serial numbers, dongle/USB keys and audit and compliance teams. Product activation is clearly becoming the leading method, with 47% using it today and 57% expected use by 2007.

"As the software industry matures and vendors become more customer-centric, we will start to see more diversity in the product assortment and pricing offered," said Fred Amoroso, CEO of Macrovision. "Software vendors are turning to new license models and automated compliance technologies to ensure that enterprise needs are met."

"Many software companies today are in the midst of important changes in their businesses," said Ken Wasch, president of the SIIA. "The data from this study show that although software vendors are moving forward and adapting to new market realities, they need to embrace the new models in order to grow revenues and keep customers happy."

The report is based on a detailed survey conducted in August and September 2005 of approximately 500 software industry executives. The executives were reached via a combination of lists from the SIIA, the principal trade association for the software and digital content industry, CIO Magazine, and other third-party sources.

For a free copy of the complete report, please visit

About SIIA
The Software & Information Industry Association (SIIA) is the principal trade association for the software and digital content industry. SIIA provides global services in government relations, business development, corporate education and intellectual property protection to more than 600 leading software and information companies. For more information, visit

Macrovision Corporation is the market leader in electronic licensing, installation, and digital rights management (DRM) technologies. Over 50,000 software vendors, publishers and virtually all of the Fortune 1000 companies use Macrovision's technologies to maximize the value of their software. Software Value Management solutions bridge the gap between pricing and packaging software on the developer side, and purchasing and managing that software on the enterprise side. Macrovision markets the FlexNet Software Value Management platform which includes FlexNet Publisher, the InstallShield suite of software installation tools and the AdminStudio application packaging solutions, which are deployed on more than 500 million desktops worldwide. Macrovision holds more than 910 software licensing, DRM and content protection patents worldwide. Macrovision is headquartered in Santa Clara, California and has offices worldwide. More information about Macrovision and Software Value Management solutions can be found at

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