By: Prerna Sharma & Ruchika Goel
Given the complexities involved in software licensing, there is a huge market demand for licensing consultants in India. Naturally, SoftwareONE, a global software licence consulting firm, is seeing huge potential in the Indian market and has made inroads into the country to cash in on the opportunity. In an interview with Dataquest, Mayank Srivastava, Managing Director & General Manager, SoftwareONE talks in detail about the company’s business model, strategy, and unique challenges as a start-up in the niche segment. Excerpts
What was the idea and key objective behind starting SoftwareONE in India, considering that you were already working with Microsoft?
While working with Microsoft, I was a part of the worldwide licensing and pricing team where we used to discuss how pricing is done and licensing is managed for our customers. When we went for customer meetings, we understood that licensing is a hugely complex process. The terms, conditions, right usage is not very clear to the customers end to end. The customers are always perplexed about the kind of models they should use, contracts they should sign, and how can they justify the RoI on the investment.
We went through a huge round of trainings internally where we understood what licensing is all about. What’s the philosophy behind Microsoft and what’s the school of thought when they built a licensing program or they built use rights for a particular program. For example, we understood the philosophy behind why a product X can be used in a particular environment by a said number of users.
Microsoft is just one example; the case is similar with Oracle, VMware, and SAP. The licensing document itself is about 350 pages and nobody has the time to read it. When we went and met customers, we realized they were in need of somebody who could understand licensing in and out and make it transparent to them. So, when I got an opportunity to interact with SoftwareONE, a global company headquartered in Switzerland, which was purely into licensing, I thought that I could leverage on my strengths and my knowledge and could help head the brand in India. I knew the market potential was huge as there was a need for strong licensing consultants. It was an easier thing for me to join and start a company and hire the right kind of people, go to market, and be the trusted advisor for the customers.
What is the key differentiator for SoftwareONE in the licensing industry?
If you look at the overall community in India, traditionally it is a community of re-sellers—they typically buy and sell, they don’t do any value add in terms of services. What typically happens is software is a commodity and it is a standard package product, you cannot alter or change the product from a feature standpoint because it is standard and it is the copyright of the publisher. What you can do is that you can understand the feature of the software and try and sell it.
All the publishers have partner channel programs where they appoint channel partners and use them for transactions. All the channel partners buy the software and add their cost of transaction. This is what they were doing earlier. The customers were supposed to use and deploy the license on their own as and when they required and also used to install them on their own. Earlier, it used to come in DVDs and CDs and now it comes online. But how to use the features, how to train people was still owned by publishers.
When I was with Microsoft, I was working with a huge set of channel partners. SotwareONE was the first company where they said we want to tell the customer what all possible licensing solutions are there which typically can be known if the person has worked in that environment. There are a very few people who can talk about licensing to end customers. I build a team of consultants who had this knowledge and could take this knowledge to end customers, so that the customers trust us for what-ever they are buying—they are not being forced to buy,
they can see the value of the product, compare the pricing,
and do RoI analysis on the investment they make,
and then buy. So this is where SoftwareONE stood out.
What challenges did you face while starting SoftwareONE?
I think the biggest challenge was finding the right people and trying to convince them to join us. We started off in a very small office in West Delhi and the candidates who would come for interviews did not feel that this was a look and feel of a global MNC. It was very difficult for us to convince people to start working in a start-up environment because they were not sure how long and how secure their future was with us.
Second biggest challenge was trying to tell the customers that we are a team of people who are starting and be a part of us, because start-up companies usually don’t get a heads up into large enterprises because they have been working with other engagements. For example, a large customer is working with Dell for everything—services, laptops, desktops, and software. How do you breakinto the account?
Initially, it was very difficult to pitch rightly to the end customer
and you need to have a team in place that is able to deliver that as well. Understanding the taxation system was also difficult. It is even difficult today. To comply with all the laws and to ensure we have enough liquidity to be able to manage the business was also another challenge. Scale was also a challenge because a lot of these companies have offices all over the country and they wanted local representatives to be there. So it was important for us to scale fast.
Do you work with partner channels?
We work with them on a different model all together. We are the channel partner of Microsoft because we also buy and sell but we buy and sell independently and advise customers on the right model. Advisory services come as a part of our reselling business model to the end customer.
We have the VARassist model with our channel ecosystems—if there are small partners like networking partners, hardware partners who can influence their customers to buy software through us or use SoftwareONE as their consultant, we typically give them a portion of the profitability.
So the partners can refer their end customers to us and then we will share the profitability transparently with them. That is the model we brought in India which was earlier used worldwide by SoftwareONE. We started talking to customers to understand their pain points to differentiate ourselves from others. We not only help our customers in giving the right kind of product but also share our experiences with them.
Do you work with any specific software publishers?
If you look at the overall business we do in India, we do about $200 mn business, about Rs 1,200 crore and nearly 80% of it is Microsoft, then we have IBM, Adobe, VMware, and Oracle. These are the top five publishers.
Can you suggest some steps that companies can take to fill the compliance gap?
Compliance gap can be filled by setting up the right practices and processes internally. Typically, in an organization, user teams and business teams have different software requirements and they all go to the procurement division, which then initiates the purchase. But who manages these assets, and who controls the usages of these licenses. Nobody. Only a few large companies have a separate compliance team to control, monitor, and track.
One of the major risks in organizations that lack robust software compliance and monitoring processes is that they cannot track which software is being taken by employees when they leave the organization. Therefore, you need to have the right process built in to be able to monitor the usage of licenses, control the usage of licenses, and ensure that you are able to comply with all the usage terms of a license. We advise customers on how to set up the right processes—what should be the right workflow from the time a user intends to buy the software to the time it is actually delivered. More importantly, customers need to have a practice and workflow internally that they need to follow to ensure compliance.
In your opinion, which model is preferred by customers—cloud or on-premise?
Depends upon the segment. Typically, all large and medium organizations are still using on-premise. Companies with less than 2,000 employees are trying to migrate to cloud because of the added advantage of not having to take care of hardware, bear maintenance cost, etc. So now companies are moving their basic solutions and requirements on cloud. Everyone wants uptime, fast access, and ease of use, which is where cloud is making more sense. But the biggest problem is that all the datacenters reside outside India.