21 August 2006 – Buying software is often a throw-away expense. Agencies purchase software licenses knowing they have no resale value. Software vendor Bentley Systems, which makes GIS software, said it plans to address such inefficiency with a new concept.
In September, Bentley will introduce the Annual License Exchange (ALE) programme, which lets customers trade their software licenses for full purchase-price credit once a year.
With ALE, an agency can annually rebalance its technology portfolio to reflect new business needs, replace underutilized licenses, or adopt new communication and collaboration technologies, said Joe Croser, Bentley’s Director of Global Marketing. An agency’s investment in software licenses doesn’t have to equal zero, he added.
Government agencies that don’t want to commit to a long-term enterprise license programme might opt for the ALE model, company officials said. The Federal Aviation Administration, a Bentley customer, does not use enterprise licensing and could save money with ALE, said Malcolm Walter, the company’s chief operating officer.
In the ALE programme, government contractors, for example, could potentially save money by not needing to license the Bentley software for specific agencies or projects as they do now. “The entity that they might be doing business with this year might be different than the one they might be doing business with next year,” Walter said.
Ray Wang, a principal analyst at Forrester Research, said the new license exchange programme reflects Bentley’s customer-focused strategy. Users can adjust their software portfolios as they change and grow, Wang said.
For Bentley, the potential advantages are twofold, he added. ALE could keep customers in the Bentley family for a long time, and it could help engender greater cooperation between Bentley and its customers in developing future software.
Other analysts, however, warn that a license exchange programme could create contractual problems for federal agencies. When dealing with the federal government, contract changes are complex, said Jim Krouse, acting director of public-sector market analysis at Input. “When a government agency makes a purchase decision for a software license, there are well-defined terms and conditions,” Krouse said.
Trading in software for upgrades could violate contracting rules, he added. Competing software companies might argue that they did not have the opportunity to bid on the licensing. However, he said, some federal contracts might allow for such upgrades, depending on how they are written.
Bentley officials said they created the license exchange programme to expand business. The company already counts as its clients 90 percent of Engineering News-Record’s top 500 infrastructure companies. The best way for Bentley to expand that customer base is to help its customers grow, Croser said. Offering new communication and collaboration technologies and novel licensing strategies will enable Bentley’s clients to undertake bigger projects, he said.
Bentley’s biggest federal customer is the Army Corps of Engineers, which licenses software under the company’s Enterprise License Subscription (ELS) programme. That programme gives the corps unlimited use of the company’s 150 products for a fixed annual fee. ELS offers flexibility, but it is available only to large organizations.