L I C E N S I N G
Empowering Resellers to Help Themselves
Selling consulting-intensive and complex software in one ‘ s own region is already a challenge – doing so globally is nearly impossible for small and medium-sized software vendors on their own . The solution to this challenge is local dealers who speak the customer ‘ s language , know and understand local requirements and conditions , and refine the software with add-ons . This article looks at the handling of creation , delivery , and billing of licenses to local dealers .
On this topic , we can speak not only from our customers ‘ experience but also from our very own experience at Wibu-Systems . We sell our CodeMeter licenses to our subsidiaries and partners worldwide , and they in turn sell them to software vendors in their regions . Like many software vendors , we also rely on subscription models , which we will discuss in detail , especially regarding billing .
Production “ In Stock “ One possible strategy is to produce licenses in advance and store them at the dealer ‘ s location . This strategy has a major advantage : You have the same workflows as with hardware products . You produce , store , and ship them to customers and dealers . The dealer can decide which items to order and whether to store them in an intermediate warehouse if necessary . Another advantage is that the production of your licenses is done by your production ; this sounds logical and is quite old-fashioned .
From my experience , the disadvantages outweigh the advantages . First , every dealer un- derstands why they pay for hardware upon receipt , with the rare cases of consignment goods excepted . However , with software , everyone expects it to be billed only upon sale to the user . Second , the start of the warranty , maintenance , or subscription period is completely unclear at the time of production and requires an additional feedback channel . And the third disadvantage is the combinatorics with complex licenses . Which combination of licenses do you stock ? Or do you prefer to produce individual licenses for each function ? The risk of not having what you need in stock is as high as the risk of catching unsellable dead stock .
Production “ On Order “ The alternative is obvious . The dealer orders the license in a configuration they want . This order is recorded in your ERP system and triggers the production of the individual license .
The advantages are clear : billing upon order , no “ wrong “ licenses in stock , analogous processes to individually configured hardware , and warranty , maintenance , or subscription periods are already determined at the time of production .
However , there is a significant disadvantage : Depending on your processes and time zone delays , it can take several hours to days from order receipt through order recording and production to delivery .
Point System I would not want to withhold the option of a point system from you . The customer or dealer buys a number of points from you . Functions in the software have corresponding values .
You produce the points and put them in stock . The dealer stocks up on them . When configuring the software , the dealer transfers the points to the customer .
Personally , I am not a fan of such a solution , as it mainly loses transparency about which feature was sold how often . Also , subscription and maintenance contracts are difficult to depict . Providing proof of the warranty period becomes more complicated . Support processes
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