Business Strategy for Software Executives

January 21, 2008

Unlicensed Software Attacks the Bottom Line

A new study confirms software misuse costs vendors billions. Here are strategies for reducing revenue loss.

By Tom Lamoureux, KPMG

Research conducted by International Data Corporation (IDC) in 2005 concluded that the world’s software companies were losing USD34 billion in revenue to unlicensed installations. This is more than the gross domestic product (GDP) of 42 countries. Said another way, a USD34 billion software company would be almost on par with Microsoft’s annual revenue as the second largest software company in the world. It would be nearly twice as large as IBM’s software business, which racks up USD18 billion in software revenue annually. Any way you look at it, this is a very significant problem for the industry, one that is due in part to software license agreement violations.

KPMG surveyed software companies in order to understand the license compliance issues faced by most software companies today. The resulting insight shed a light on the extent of the problem and identified better practices in license compliance being applied by software companies today.

Attention Cutting-Edge SaaS Companies:
Apply Today for the Software 2008 Innovation Showcase

We are seeking exciting Saas application and infrastructure companies to speak at the Innovation Showcase at Software 2008. The program selects only the most promising vendors to present at the conference: in the 18 months since Software 2006, 12 of 20 Innovation Showcase companies have experienced a major financial event –including two IPOs from 2007’s class.

Innovation Showcase companies will receive a variety of PR and marketing opportunities at Software 2008 – the most influential gathering of enterprise software executives and investors of the year. Apply for the Innovation Showcase today at: http://www.software2008.com/showcase/

Increasing Staff Retention Offshore

Reducing turnover is one of the biggest challenges for software vendors operating offshore. Anuradha Parthasarathy of Global Executive Talent explores the problem and recommends several solutions in this post to the SandHill.com Blog on offshoring best practices.

A Tale of Two Elephants

BEA and MySQL were swallowed last week in two more mammoth deals for the software industry. M.R. Rangaswami of Sand Hill Group says the acquisitions have big implications for the software business Read why in this post to his SandHill.com Blog.

Publish Your Perspective!

SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (maryann@sandhill.com) and have your opinions published on our site.

Planning for the New Year?
Register Now for Software 2008

Start 2008 right by registering early for the most influential conference of the year: Software 2008. The industry’s must-attend event will take place on April 29-30 in Las Vegas. Software’s most influential CEOs, top executives, investors and professionals will gather to share insight on the theme for 2008: Communicate, Collaborate & Innovate. Purchase a conference pass now and qualify for an early-bird discount of $500 off the regular price! Reserve your spot today.

Harnessing the Power of Informal Employee Networks

Formalizing a company's ad hoc peer groups can spur collaboration and unlock value. Uncover strategies for success in this article from The McKinsey Quarterly. Read how in this article from The McKinsey Quarterly.

News Update: A Seismic Shake-up

Consolidation redraws the enterprise software vendor landscape - again; plus, more Microsoft executive moves, Google goes to Washington and billions flow from VCs. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.

Poll: Unlicensed Usage of Your Software?

How much of your company’s software do you estimate is being used without a license?
Take our Pulse Poll >>

Last week, readers voted on whether calls for reform have an impact on the reliability of software.
Give us your opinion and see the results >>

More at SandHill.com:

Read the most important enterprise software industry news of the week >>

Monitor the latest software venture capital deals >>

Size up last week's software M&A deals >>

See who's made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the SandHill.com site.

Parting Thought

“An army of sheep led by a lion would defeat an army of lions led by a sheep.”
–Arabian Proverb

Courtesy of Malcolm Kusher, The Kushner Group

THIS WEEK'S SPONSOR

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SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.