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One of the business models that software vendors are really getting excited about is a usage-based or metered approach. To software monetization.
Now, this is really a perfect complement to entitlement management in the following way. So what an entitlement does is when you sell that to a customer, you're really defining what is it that customer can do? What features, what abilities, what capacities, etc, you're going to unlock in the software based on the license they purchased. So that's great. That allows you to implement a wide variety of different business models, perpetual, floating, etc.
But none of that really takes into account. Okay.
How are they actually making use of it? So you sold them a hundred concurrent seats how many are they actually using? So, of course, one of the things we do, even as part of straight entitlement management and license enforcement, is allow you to bring that data back into the cloud so you can use that for various types of analysis.
Now from a usage based pricing standpoint, what we can allow you to do is to map that usage data back against the billing model.
So you can now have a hybrid between an entitlement that defines what they can do And then the treatment of the usage against that and map that back into some variable based billing model.
So for an example, you might sell a one year subscription to a hundred seats and give them the ability to have overdraft, above a hundred seats with another twenty seats and another thirty seats and so forth.
So you'll monetize that for the one year subscription, assuming that they're only using those hundred seats.
But you'll track from a what did they do aspect. You'll track any kind of usage of those overdraft seats and flow that again against a pre-agreed business model to say, okay, we're gonna charge you on this basis. Perhaps for the high watermark, or we're gonna charge you for any day where you go above the hundred purchase seats, or whatever you and that customer agrees to. Now, of course, you can also simply use that information as a way of understanding sort of that additional usage So you don't actually bill them for that, but you do take that into account as you manage the renewal process and configure their license at a more appropriate higher level for that renewal.
So perfect marriage between entitlement management and usage tracking, and then mapping that into a billing model gives you a full usage-based or metered approach to monetization.