Software Licensing Policy
For a major computer company, Ventana developed a model to evaluate software licensing policies. The specific project objectives were to predict the financial results and side effects of alternative licensing policies, provide policy insights, optimize strategies, quantify risk and identify the best ways to reduce it. Through the use of policy simulation, Ventana discovered a fatal weakness in the policy proposed by management. The analysis showed that the proposed policy would cut down on the illegal copies of software at customer sites (a policy goal), but it also create deleterious side effects and logistics problems.
At the time, most software vendors considered variations on the proposed scheme. Although Ventana’s client had identified the key factors involved in changing this policy, its intuitive quantification of them was wrong. It also had badly underestimated the time required to change from one policy to another. Market testing soon confirmed Ventana’s assessment. The new policy would have greatly increased customer inconvenience. Consequently, it would have resulted in high customer dissatisfaction. So unlike other companies that introduced and then abandoned copy-protection schemes, Ventana’s client was able to avoid what everyone in the industry was later to recognize as a serious marketing mistake.