Everyone is familiar with the traditional way that software is licensed. A customer buys a license and is then allowed to use the software. This works fine for using software internally within the walls of an organization. But what if the company buying the license is in the business of providing software as a service to other companies?
This is where things can get tricky.
One of the biggest problems that solution providers face is the fact that they have to buy licenses up front (which are very expensive). Combine those costs with hardware, infrastructure, billing, overhead, etc., and it’s easy to envision a scenario where it takes the service provider six months or more just to break even after they acquire a new customer. (And what if the customer leaves after that? Too bad! They're stuck with all those licenses you just bought!)
Of course in the real world, software vendors understand that companies who provide software as a service need special license programs. Microsoft has a program that’s called the “Service Provider Licensing Program” (SPLA) that’s available for many of their products.
So for example, if a company wants to provide hosted Exchange email services, they might be able to set up an unlimited number of mailboxes each month and then pay Microsoft a small amount for the actual number of mailboxes used in a month, instead of having to buy a full Exchange CAL for each user the first month that customer joins. This SPLA program also applies to terminal services CALs, allowing companies that host HR or accounting software for customers to do so with terminal services technology.
Sounds good, right? The problem is that when it comes to hosting Windows applications for remote, non-employee users, it’s really hard to do it with pure terminal services. Of course this is where companies like Citrix come in. Unfortunately I just learned that Citrix does not offer any kind of service provider or “pay as you go” type of licensing agreement!
I learned this last week when I received an email from a guy who’s part of a consortium of managed service providers in the accounting industry. Their group is looking to take their services to the next level where they host everything, and clients just connect to their apps via a web page (and maybe even via a thin client). They’re all enrolled in Microsoft’s SPLA program, but since Citrix doesn’t have anything like this they can’t use Presentation Server since they upfront costs would break them and it would take 6-8 months just to recover those.
So they called me and basically asked, “How can we do this without using Citrix?”
My first answer was that of course there are a lot of really solid terminal services add-on products out there now--2X, Provision Networks, Ericom, etc., and all of these companies would be happy to discuss SPLA-type licensing.
But more to the point, why isn’t Citrix offering this? I know they used to via a program they called their “iBusiness” program. In fact, a quick Google search of “Citrix iBusiness” turns up an article from Citrix’s own knowledgebase explaining how this pay-as-you-go iLicensing program works for MetaFrame XP. But where did it go?
I made some calls to Citrix and got in touch with a couple of folks from their licensing group and asked them about this. They were helpful and interested in talking, but their basic answer was along the lines of “if there is enough demand, we’ll make a program like this.”
So, to summarize, I ask you, the community, what do you think? Should Citrix resurrect their pay-as-you-licensing program for service providers, or is this market better left to the smaller SBC companies?