Software Execs: Tame Friction, Drive Revenue in 2014

Executives from Hewlett Packard, Oracle, Adobe and EMC implored compliance managers to trust their customers more and audit less—and expect greater returns

Software compliance executives from HP, Oracle, Adobe and EMC launched the second-annual Compliance Manager Summit on March 10 with a lively panel discussion. Led by moderator David Welch, director of the Licensing Services Group at NetApp, these experts offered insight into the trickiest challenges software-company compliance managers are tackling this year.

The panelists advised attendees to aim for a delicate balance: Build a friction-free partnership with customers while also driving revenue through the software compliance organization.

Changing the dynamics
"We talk with complete transparency and establish a baseline for customers, so they know what they need to purchase. We have a fiduciary responsibility to protect our intellectual property," said Bonnie Pau, Adobe's Director of Americas, License Management, and Regional Head of NA License and Compliance. She added that even though customers might view her department's work as "just a sales pitch," they're actually trying to help them avoid dealing with an expensive compliance shortfall.

"If I never have to do another audit, that would be a really good thing," declared Christian Pruitt, Hewlett-Packard's director of worldwide compliance of software, hardware and support.

"I'm trying to change the dynamics with the customers from focusing on enforcement to focusing on education. I'm not altruistic in this business—all of my metrics derive around driving revenue. But I can do it without audits. I can drive value through the educational model," said Pruitt.

Customers struggle with understanding both what software they have installed across their enterprises and what the licensing contracts are for each application from myriad vendors. Increasing SaaS (software as a service) deployments further complicate the licensing picture for most compliance managers. In general, the panelists noted, there is little intentional piracy.

"We understand it's difficult to know what they've deployed. We'll help those accounts build that picture [of] hardware and software. We'll work with them so they can make decisions about how to get from where they are now to where they want to be," said Jared Collins, World Wide Director of Asset Management Services (AMS) at EMC.

He pointed out that EMC customers often come to his AMS organization looking for help. They need to gain a clearer picture of the software and hardware they've purchased and the maintenance contracts they've signed. Until they better understand their contractual obligations, they may refuse to make any additional purchases.

Changing the relationship
Collins' experience underlines the changing relationship between the software-company compliance management organization and customers. The panelists described a shift from dreaded enforcer to a perhaps grudgingly accepted partner.

"We were considered the hammer—we took what we needed. And we got this really bad reputation in the industry. We've spent over a decade trying to fix that. Now we want to be that helpful partner," said Melissa Alexander, License Management Services Senior Manager, Enterprise Accounts, ULA and ELA Services at Oracle.

"We work together [with the customer] to get the audit done in a timely way. Notification letters aren't always required, but it is a standard of doing business," she added.

Building a friction-free partnership
All four panelists described a sort of dance they do to protect their companies' software and preserve the existing relationships with their customers. They described the ways they engage with customers to try to minimize the tension inherent to an audit, whether they send a notification letter or not. They each try not to begin the process as a suspicious adversary, trusting that the customer will be as honest as they can be with the information they know.

Pruitt said he asks "not do we trust you, but do you have what you need manage intellectual property? This is a more collaborative environment with less friction."

For Collins and Pau, that means focusing the conversation with noncompliant customers on actual data—data about the customers' software deployments, usage and entitlements. They advised full transparency when sharing the data with customers and demonstrating to them how the data was verified and validated. Pau notes that taking a data-driven tack enables customers to understand gaps in their licensing contracts and identify what they're required to pay for—and, for software-company compliance managers that partner with customer account teams, that leaves a natural opening for the sales group.

"We're focused on transparency to drive sales. We're focused on helping the sales team enable deals—identify deals, close them faster and build better baselines for them to work with," said Collins.

Like Adobe's Pau, the compliance experts from HP, EMC and Oracle work side-by-side with sales to drive revenue from their organization.

"It's building the right relationship with the customer and extending it beyond the audit process. It's having more long-term effects than the three to six month [audit] cycle time," said Pau. "You hand the sales team a lead—it's how they expand it."

Leslie T. O'Neill is a writer based in Pleasanton, CA.