Altair’s New Licensing for solidThinking is a Win for SMEs

A major barrier to innovation for startups and small and medium enterprises (SMEs) is the cost of simulation software. Combining this cost with the learning curve required to apply the principles embedded in computer-aided engineering (CAE) has resulted in many great ideas not getting to market. It is widely recognised that SMEs are the powerhouse of economic growth globally, and that every effort should be made to facilitate their rocky path to create a sustainable business. Altair’s contribution to SME growth is to make CAE more accessible, firstly by changing their licensing model for solidThinking.

Eight years ago, when they released Hyperworks 11.0, Altair changed their license manager from Flexera to LM-X from X-Formation. The objective of this change was to provide greater flexibility in the licensing options offered to customers, especially for their Hyperworks suite. The licensing model is units-based and the customer buys and uses the Hyperworks units (HWUs) according to the business need, selecting the specific software they require from the suite, rather than buying licenses for each product. Users of solidThinking software were still required to buy each of the products they wanted, based on the license model that was in force when Altair acquired solidThinking.

Although Altair had purchased solidThinking in 2008, they did not change the license management software from the original Flexera FlexLM and the purchase-per-product approach until recently, in August 2018. solidThinking units (sTUs) are now available for all products in the solidThinking suite. The units are stored in a pool, and the user books out the software he needs by checking out the number of units required for that application, for instance, Altair Inspire 2018. On finishing with the application, the sTUs are returned to the pool for the next user.

A Single Licensing Model for On-Site and the Cloud

To simplify the license model even more, the software can either be used on-site or in the cloud. This is useful for SMEs who have limited computing power and want to avail themselves of cloud services, such as Altair’s own cloud-hosting service, Altair 365. The number of units required for the organization is also flexible; units can be added or removed to fit current circumstances.

Existing customers can convert to the new model with the minimum of fuss:-

  • Perpetual license holders with maintenance agreements will have their licenses converted to full sTU licenses for the same cost as the existing annual maintenance agreement.
  • Where the perpetual license holder had let their maintenance agreement lapse, there was an offer made  to upgrade the existing licenses during an incentive period, which lapsed at the end of December 2018.
  • Where the licenses were being leased, the customer is upgraded to sTU licensing at no additional cost.

For all existing license holders, the conversion gives them access to the entire solidThinking suite of applications, and the ability to run the programs on-site or in the cloud.

More Intuitive Software

Altair recognizes that many SMEs will not have the necessary skills on-board to handle the complexities of CAE. To this end, they have focused on making the simulation products easy to use and intuitive, both for engineers who are familiar with simulation software and other resources who are not from a engineering background but need to run simulations. The combination of easy-to-use software and an affordable pricing model make solidThinking an attractive option for SMEs. Through purchasing sTUs, they have access to 9 applications, ranging from conceptual designs using Evolve through to extrusion and cast metal moulding using the Inspire applications for this. There is even Compose, a programming language for mathematical modelling, similar to Matlab.

The flexibility of the solution, combined with its scaleability, allows an SME to develop and grow at their own pace. Cost constraints imposed by the need to invest in costly high-performance computing can be avoided by using the cloud, either Altair’s own service or another cloud provider. By removing the barriers to using simulation software, Altair has levelled the playing field for small businesses to compete against large organizations. Using simulation software instead of prototyping both reduces costs of product development and accelerates time to market.

Small Startups get a Boost

While Altair has come up with this licensing model to boost innovation by small businesses, it recognises that the cost may still be beyond the means of early-stage startups. For this reason they have developed a startup program for startups and entrepreneurs who meet certain criteria, including:-

  • an annual revenue of less than $10 million
  • a privately held concern, and
  • less than 4 years old.

Apart from providing software at deep discounts of up to 80%, Altair also offers free consultancy and training to such startups. They are also prepared to assist SMEs who do not meet the criteria with discounts, based on the current state of their business.

Like other vendors providing simulation software, Altair facilitates academic institutions by providing discounted software to the institutions and teachers, and free software to students who need to perform simulations as part of their studies.

How Altair benefits from the New License Model

While the units-based license model brings in less revenue from a user who previously had to buy each of the solidThinking applications separately, Altair have opened up their market to a new customer base of SMEs and startups. This means more sales and the ability to partner with small businesses as they grow. Their larger customers, such as Airbus and Samsung, can also benefit from the new business model, which is easy to administer and tailor according to demand.

Customers who start the relationship with solidThinking products can move on to other Altair products as the need arises, such as their high-performance platform or Internet of Things and digital twins platforms. In this respect, the new license model is a win-win for both Altair and their customers.

How To Survive a Software Audit – six-step guide to make sure you are on top of things.

The threat of an impending software audit causes many CIOs to lose sleep. It is understandable when you consider how vendors like SAP have been pursuing their customers with non-compliance suits that carry price tags in the hundreds of millions.  Most organizations focus on their ERP, HR and general office software, supplied by vendors such as Oracle or Microsoft. Specialized applications are often overlooked, unless there is a heavy investment in them, so you will find that an engineering company will monitor their Autodesk licenses while software from other vendors, such as Ansys, is overlooked, because there are only a few licenses. The risk of a software audit where you have bought software via an on-site agreement, such as a perpetual license, remains the same for any software as it does for the AutoCAD or ArcGIS license. However, software compliance need not be an issue if the organization takes an active interest in adhering to the contents of their license agreements. Too many companies rely on their vendors to tell them about their licensing costs, where they should be monitoring these costs themselves. We discuss some actions to be taken to take control of license management that will make audit nightmares a thing of the past.  

Do You Know Where your Licenses Are?

The answer to this may seem obvious, but specialized software has a nasty habit of entering an organization by stealth. It is purchased to fill a legitimate need, but ownership and management is often vested in the department that needed it, such as transmission engineering or geological exploration. IT may not even be aware that it is on site. So a reconciliation of what software is being used is a very good start and may turn up some surprising results.

Do You Know the Specific Details of each License Agreement?

You may be out of compliance if the fine detail of the license agreement has not been analysed. Gartner Group have studied the risks of license governance for some time and have found that actual reading and dissection of what the license agreement says is often neglected. They mention some amusing cases, such as an agreement where the user had to surrender their first-born son in return for using the software (6 people signed up). Another vendor included the promise of a cash reward to any user who signed up for their application. Four months and 3000 sales later, someone actually claimed. Gartner also points out that it is not necessarily your biggest vendor that will conduct a software audit.

This may seem like a great deal of work, but it is a once-off exercise that is very valuable. There can be holes in some of the strictures that the vendors place on the user. Cerno produced a report on this, identifying 8 weaknesses in Oracle’s standard licensing agreement, which is worth a read if you want an idea of what is reasonable and generally accepted under US and UK law and what is an imposition.  This ranges from vendor’s right of access to what assistance the user company is required to provide. The customer who knows their rights has the upper hand when it comes to an Oracle audit, and this probably applies to many other vendor agreements.

It is also recommended that you keep all your old license agreements, as deviations from the original agreement may have crept in over the years.

Review your Software Policies

Licensing models are becoming more complex  and your software policy may not be covering all bases. Some of the important points to be covered include:-

  • who manages the licenses – ideally this should be centralized for all applications, but if not rules and responsibilities that will ensure compliance must be documented
  • access and entitlement, based on whether the user is an employee or a contractor.
  • BYOD and BYOA (Bring your own device/application). If a user brings in their own laptop running AutoCAD and a few other applications, this can contravene your agreements, as well as theirs.
  • cloud applications. Most companies assume that cloud usage removes the need for audits (it does) and therefore compliance too (not so).
  • other forms of licensing, such as SaaS, token and embedded licenses.
  • if you have been involved in recent mergers and acquisitions, your policies and license agreements will not be aligned, and this may have been overlooked.

This is not an exhaustive list, for instance, you may have outsourced your licensing management to a third party which is covered by an SLA. The management of the outsourcing must be clearly defined.

Are You Relying on Your Vendor’s License Management?

Most vendors supply you with a license manager, usually from specialist license management companies like Flexera or Gemalto. These applications manage licenses from the vendor’s perspective, not yours, although some of the newer license types, like embedded licenses are more customer-centric. The provided software is designed around accumulating costs for the vendor to charge you. In some cases, such as with Autodesk Token-Flex, these costs can be excessive if you do not understand the nuances of how the token time units work.

It is just not viable to build manual processes to calculate costs from your perspective, so investing in an agnostic license management application is your best bet. Not only does a good application calculate usage costs, it can be used to optimize license usage and can save you thousands of dollars or more annually. OpenLM specializes in license management for engineering and scientific software, and even has extensions for other commercial software and custom-built products. There is competition from Flexera and a few others, but your best option is to evaluate the products that appeal to you. We are confident that we will come out tops.

With your own license manager software you can now calculate license costs which you can use as evidence in the case of an audit.

Who does your Vendor use for their Audits?

We mentioned Cerno earlier; they are a specialist company who assist organizations with software audits. They recently published a very interesting report “Sleeping with the Enemy”,  which points out that, if you share the same “Big 4” auditor as your vendor, they are more likely to side with the vendor in the case of a dispute.  Each of the auditing firms has a software audit arm that is contracted by the vendor to perform and pursue audits.

You can access the report here.

Cerno lists six British local authorities which were audited on behalf of Microsoft by their own external auditors, as well as a British University that was audited by KPMG, their Auditors, for SAP. This is a clear conflict of interests, no matter how much the Auditors can claim an arm’s length relationship and objectivity.

Build your own Audit Lab

Forewarned is forearmed. Why not set up a ‘lab” for performing random self-audits. This will both keep everyone on their toes with regards to license compliance, it will ensure that you are compliant. Implement processes and procedures for conducting an audit and become an active participant in license compliance, rather than a passive one. You can re-use these for the day when a vendor decides to call.  You may require some external advice initially, but once you have implemented the processes and educated the organization on your software policy, “auditophobia” will become a thing of the past. OpenLM can also assist in this regard, as well as helping you find efficiencies and cost savings along the way.

Gemalto’s Embedded Licenses – Securing your Software

Gemalto is well-known for their security solutions. They have branched into software licensing by acquiring SafeNet, which was a very synergistic merger.  The Sentinel product range, which is now under their roof, is a popular choice among software vendors, offering both soft and hard-key options for protecting valuable and expensive applications from unauthorised use. While Gemalto can offer solutions for both on-site and cloud licensing, our focus today is on their embedded licenses and the Internet of Things.

A Shift in Understanding

Manufacturers of sensors, devices and major equipment have come to understand that the real value of their products is in the software that is integral to the product, rather than the hardware, which is a once-off purchase. Managing and monetizing usage of the software can provide a steady revenue stream long after the purchase has taken place. This is where Gemalto has been busy developing a comprehensive solution. A combination of Sentinel’s license management with Gemalto’s cybersecurity is flexible and robust enough to protect and monitor anything from sensors measuring heat given off by urban buildings to major healthcare and industrial equipment, such as MRIs or cranes.

Using embedded licenses can have a major impact on inventory and product range. The application can be used to activate or suppress one or more features of a product, removing the necessity to keep a different physical product for each permutation. The company can carry a lean and minimal physical product range, with a wide and diverse virtual list of products, the features of which are differentiated by the licensing software. They can also be confident that their intellectual property is secure and protected from tampering and hacking.

An Enhanced Customer Relationship

While using embedded licenses requires a complete rethink of how products are assembled and delivered, there is also a major change in the vendor-customer relationship. Traditional licensing was focused on ensuring that the customer was compliant with their licensing agreement. The software monetization approach is collaborative rather than adversarial (Think of SAP vs Diageo). The benefit of being able to receive real- or near-time data on what products and features the customer is using is twofold; the vendor has visibility into what features each customer needs and can capitalize on up-selling or cross-selling opportunities; secondly, analysing the data for the entire customer base identifies future products.

Managing these licenses is by entitlement; each customer and each user of that customer can have his own profile of the product, with features switched on or off.

The vendor can also design his own licensing model, opting for prepaid, where a new feature or application must be requested before it can be used, pay-as-you-go, or even post-paid, where it can be used and paid for retrospectively. The flexibility is possible because of the usage data being streamed up from the customer; the vendor knows how the customer is using the devices and the software within these devices.

Sentinel Fit -When Size does Matter

Gemalto claim to have the smallest software licensing product on the market with Sentinel Fit. Specially designed for the most basic of devices, its footprint ranges from 1,5KB RAM for AES (Advanced Encryption Standard) to 13Kb RAM for RSA (Rivest, Shamir and Adleman, the cryptographers) encryption. Flash storage uses more (6.5Kb for AES and 34Kb for RSA). This does not mean it is not scalable, it can support up to 65K licenses of features or functions.  It is available in kit form and the runtime source code can be accessed. It has also been designed to work in most environments and across most platforms.

This small package is very secure, as you would expect from Gemalto; licenses are secured throughout their lifecycle from inception to decommissioning; users cannot copy the software from one device to another, because a “fingerprint” is generated that prevents this from happening.

For those vendors who want primarily to control access, entitlement and software versions, the Sentinel Fit provides a stripped-down but functional license capability. for those who need more, there is Sentinel LDK and EMS.

Sentinel LDK is a comprehensive license development kit that offers complete versatility, from physical key management through to cloud. This enables the vendor to choose any form of license management from perpetual to cloud to provide a license that is the best fit for the customer.  In tandem with Sentinel EMS, it covers all aspects of licensing and entitlement.

Pulling it All Together – Sentinel EMS

Sentinel EMS is a license and entitlement management system that can easily integrate a company’s back office and enterprise applications, including SAP, Salesforce and Oracle. It has a customer self-service portal too. Sentinel Fit feeds data to the EMS and this data can be analysed to provide intelligence on:-

  • licensing compliance
  • how products are being utilized, and which features are most used
  • future products and toolkits for the market

It can also be used to notify users of upcoming upgrades, contract renewals and enhancements and fixes. This is a useful feature, which improves the customer experience, together with the self-service portal. The portal gives the customer excellent flexibility in managing their licenses. It can be:-

  • customised to allow customers to manage their licenses independently, without having to rely on Support Services – this allows customers to perform actions like activation, renewal and upgrades, depending on the vendor’s business model or models
  • branded to match your website (white-label software)
  • integrated with other software services that support customer experience, such as your CRM

There are other products from Gemalto, such as Sentinel Up, which manages upgrades and enhancements, Sentinel Cloud for web-based access, as well as their core license management offering, Sentinel RMS. All the products integrate and can cover the whole geography of license management, from on-site to cloud. They also have a comprehensive set of hardware devices that can be used to increase security, such as dongles and USB cards. Gemalto has an impressive list of customers, including many in the engineering and scientific realms. Two of them are Stryker and Trimble.

Some Embedded License Experiences

Stryker as a major manufacturer of medical devices had been using dongles to protect the software that drives these products. The challenge with physical licensing is addition or replacement of the license manager when required; it takes time to get to the customer, while time can be a critical component in healthcare. It is also expensive getting the device to the customer. They have migrated to a SaaS solution, where the software key is embedded in the device for their main product, and are rolling the same solution out across their product range.

Trimble needs no introduction to anyone in engineering. With about half a million assets to manage, license and entitlement management is a major concern for them. They also used to rely on dongle protection, but as their Marketing Director, Bill Graber explains, getting a physical license key to a customer operating in the depths of the Amazon rainforest is far more challenging than sending the license over the air (OTA) or embedding it in the product. They also are faced with disparate license models within the organization, inherited via their acquisition strategy, which has seen them bring 200 companies under the Trimble roof in the last 15 years. Sentinel EMS assists in the integration of these different models.

Which is Better: Gemalto or Flexera?

While Flexera and Gemalto are not the only providers of embedded licenses, they are the leaders, with the largest market shares. Flexera is very widely used for software license management – it is highly likely that some of the software applications you are using yourselves have Flexera licenses. The chances of having one Sentinel license or more are also high, especially if any of the software you use is protected by a dongle or other hardware device. Both vendors claim robust security features, but Gemalto may have the edge in this case, as security management is their core offering. The small footprint of Sentinel Fit is ideal for IoT sensors with very limited storage; Flexera also have a small footprint embedded license, but it has a minimum size of 50K. It is advisable to try a proof of concept with these two vendors as well as some of the smaller competitors, like Snow and Agilis, to find the best fit for your business.

 

Sibling Harmony – Embracing the Digital Twin

The concept of a “digital twin” has been around since the beginning of this century, although the name was adopted later. Dr Michael Grieves introduced the concept in 2003 at his University of Michigan Executive Course on Product Lifecycle Management (PLM), where a digital doppelganger of a physical device or product could be modelled to use in simulation and prediction of behaviour. The fact that this was a course on life-cycle management implied that the twin would be in existence throughout the product’s life.

At the time, the technology required to build and maintain the digital model was immature and prohibitively expensive. The improvement in connectivity and the rapid growth of the Internet of Things, especially the Industrial Internet of Things (IIoT) has now made the digital twin a viable and cost-effective way of optimizing design and performance. It has been adopted in the automotive industry, in oil and gas, in construction and especially by urban planners for the “smart city”.

From being a pipe dream 15 years ago, the digital twin has moved rapidly up Gartner’s Hype Cycle for Emerging Technologies from rising star in 2017 to top of the curve for 2018.

Source: Gartner Hype Cycle for Emerging technologies 2017

 

Source: Gartner Hype Cycle for Emerging technologies 2018

While there is growing interest in the idea, there are still many organizations that have not embraced the concept. However, Gartner predicts that by 2020, which is only one year away, 50% of manufacturers with annual revenues of $5 billion or more will have at least one digital twin project in place.

What Exactly is a Digital Twin?

Here is the tricky part; it is whatever you want it to be, we are not talking about identical twins in general, although there are some digital analogues that are very comprehensive, most twins mirror only what needs to be simulated, managed and monitored.

For instance, Japanese software company Zuken offers a digital twin of the wiring in a motor vehicle. The average length of wiring in a modern vehicle is about 5 kilometers, a complex and tricky piece of electrical engineering to manage and generally rendered in 2D. Zuken’s software, E3.HarnessAnalyser, replicates a 3D image of the total wiring harness, complying with the VDA 4968 (or VEC) standard, but making it accessible to the rest of the automotive design team.

Another example in the automotive industry is Tesla, who keep a digital twin of every vehicle they sell. The feedback from the sensors in each vehicle can be used for maintenance and fine tuning of that vehicle, but are also used to understand the whole Tesla ecosystem.

A digital twin is so much more than a 3D avatar of the physical asset; that is merely the body. What brings it to life is the shared physical experiences of its sibling, gathered in the field or assembly line by sensors. Real-life situations are shared, stimulating learning and refinement of the physical product via the effects on the digital asset.

This has much in common with a simulation produced using CAE (computer-aided engineering) software, such as Ansys, but takes the concept further, in that it uses real-time data streamed by sensors to do predictive modelling and identify potential hazards proactively. What-if scenarios can test extreme conditions that have not been encountered in historic or current data.

One of the challenges of building a digital twin is that it is more complex than a 3D rendition of a physical product; apart from the essential feedback of IoT sensors, it may be necessary to access data from other applications, such as the organizational ERP and CRM. So, while there are several vendors who offer digital twin products, these are only partial solutions. It pays to be agnostic in selecting software for a digital twins initiative, as no vendor is going to provide a 100% solution. There are however, some vendors who have seen the opportunity to build on their existing product offerings, incorporating various essential components from IoT platforms to augmented reality.

Some Digital Twin Vendors

Software vendors who have products in the engineering CAE space have capitalized on their expertise and offer digital twin products, notably:-

Altair

Altair , with its Hyperworx PLM platform, is an active participant in the digital twin market. Its offerings support simulation and machine learning, essential components in constructing a digital twin. This month it has finalized its acquisition of Datawatch, a predictive analytics and business intelligence company to further strengthen its capabilities in forecasting and analysing twin structures.

Ansys

Release 19.1 of Ansys simulation platform has a new feature called Twin Builder. It integrates with all the IIoT platforms available, allowing continuous monitoring of all the assets in the digital twin ecosystem. Users are able to use all the capabilities of Ansys simulation applications and can build, validate and deploy their twin configuration

Ansys and SAP have entered a mutually beneficial agreement, where Ansys can access SAP’s ERP, while SAP wins by embedding Ansys applications into its manufacturing and asset management portfolio, enabling simulation and digital twin capability.

AutoDesk

Autodesk have been taking their BIM capability, such as is found in Revit, and stretching it to encompass digital twin models. For those companies that have not yet moved to BIM, maybe they should consider leapfrogging straight to digital twinning, if they are confident that their workforce has the requisite skills to bypass the BIM phase. Autodesk also purchased SeeControl, an IoT cloud platform, to assist in providing the foundation for a digital twin environment.

Bentley

Bentley recently entered the digital twins space, announcing iTwin Services at their annual conference in London in October. They stated that their reason for coming so late to market is that the twinning of an infrastructural asset, like a highway or a construction site, is infinitely more complex than for an automobile, for instance. This is a cloud offering, and includes alliances and cooperation with Atos and Siemens.

Dassault

Dassault refer to the “virtual twin” and support it via their 3DEXPERIENCE™. With their extensive CAE product range, they are well equipped to supply digital twin capabilities, especially in the automotive industry, where they need to compete with Siemens and PTC. Building a twin to suit a company’s needs is made easier by using Dassault’s Modelica language and FMI (Functional Mockup Interface).

While it is possible to wait until the IoT sensors are installed to relay real-time data, engineers need not delay – they can design what-if scenarios to test conditions such as temperature and humidity immediately.

General Electric (GE)

General Electric’s Predix IoT platform has been enhanced to provide a basis for building digital twins. GE is using the platform to construct off-the-shelf twin solutions for specific industries. They have supplementary software and hardware, such as their Predix APM (asset performance management) and their HMI (human-machine interface) and SCADA solutions that can participate in and optimize a digital twin ecosystem.

Landmark Halliburton

With its extensive footprint in the oil and gas industry, especially in the E&P (exploration and production) or upstream space, Landmark has used its DecisionSpace® platform to bring the digital twin concept to well drilling and completion. They have defined a concept, the “Voice of the Oilfield™”, that encapsulates the digital twin components.

Source: White paper – “E&P Digital Twin in a System of Systems Model” Dr. Egidio (Ed) Marotta & Dr. Dale McMullin.

https://www.ienergy.community/Portals/1/IenergyDocs/Marketing/EP_Digital_Twin_System_of_Systems_Model.pdf

Microsoft

Microsoft have recently announced the launch of their Azure digital twin product, which links their IoT platform with devices, people and geolocations to provide a twin ecosystem. Unlike most of the other competitors in this market, which focus on large industry, Microsoft’s Azure platform works well for smaller businesses and business cases.

PTC

PTC sees augmented reality as an essential component of twin building and acquired Vuforia, an augmented reality company, from Qualcomm in 2015. This was done to integrate the Vuforia technology into PTC’s Thingworx™ IoT platform. Organizations can adopt Windchill, PTC’s PLM platform and integrate Thingworx. They can use AR headsets to visualize the digital avatar of the physical product, a true blending of the physical and the virtual.

Siemens

Like Dassault, its rival in the automotive and other industries, Siemens has solutions for digital twinning that integrate with its PLM system. The Simcenter allows current and predictive simulations. Siemens identifies three morphs of digital twins, based on their stage in the production lifecycle:-

  • Product Digital Twins Using digital twins for efficient design of new products
  • Production Digital Twins Using digital twins in manufacturing & production planning
  • Performance Digital Twins Using digital twins capture, analyze, and act on operational data

Siemens links these three ages and stages of the digital twin via a “digital thread”, which basically is the data flow between each step of the process, with the ability to provide feedback upstream, an essential of lean manufacture.

Zuken

As mentioned above, Zuken, the software specialist in PCBs and wiring and wiring harnesses, has a digital twin solution aimed at its major customers in the automotive industry. Although the offering is somewhat siloed, it brings great benefits to both the electrical and electronics engineers designing the harness and their peers who are involved in other areas of aviation and automotive design.

A Complex Licensing Challenge

Managing license compliance for digital twins will be a new challenge for license administrators, especially those working for engineering and scientific industries. From licenses for the Twin software portfolio and IoT platforms to embedded licenses used by IoT devices and AI, VR and 3D printing software, possibly lodged in a series of edge computers, the list covers every license model and permutation. There will also be GPU licenses for vendors such as Nvidia, who provide computing power to drive simulations. Add to that compliance with SAP, who are notorious for pursuing customers for breaches in use, the “build” for license management is as complex as the build for a digital twin. There probably needs to be a Chinese wall between software that drives the physical asset’s lifecycle and the digital twin’s lifecycle. This will be an emerging skill set in the license management in the next few years, especially considering Gartner’s estimation of the rapid growth of digital twinning for everything from a megacity to a domestic appliance.

Speak to OpenLM about your licensing complexities for your digital twin. OpenLM can monitor licenses for all of the engineering vendors mentioned, including Nvidia. You can also customise license management for non-engineering products with our handy extension applications.

Creating Digital Twins for Smart Cities – the Race is On

The use of a digital avatar of a physical product has become one of the hottest new technologies, thanks to the growth of the Internet of Things (IoT) and its ability to gather and upload real-time data about the physical world and apply it to the digital “twin”. The software vendors who were quick to offer services and products in this space were product lifecycle management suppliers such as Siemens and computer-aided engineering (CAE) specialists in simulation, notably Ansys and PTC.

The need to provide a similar solution to companies in the AEC (architecture, engineering and construction) space, as well as the biggest built environment, the city, brought another set of vendors on-stream, the CAD and BIM software brands, and the GIS companies. The primary focus of those in AEC and city planners starts with location. This is why companies such as ESRI have invested a lot of money into providing a digital twin platform, while CAD and CAM companies Autodesk and Bentley have enhanced their 3D CAD applications to provide digital models of buildings, neighbourhoods and entire municipalities. These can be used during concept and design phases to study the impact of the new building on its surrounds. Once built, sensors in the physical building can monitor it for maintenance and liveability issues, such as water leaks and ambient temperature, and relay this information back to its digital sibling.

Envisaging the Digital City

The benefits of building a 3D digital scale model of all or part of a city are obvious, especially when sensors and other devices like CCTV have been placed at strategic points to measure everything of relevance to running a well-maintained urban environment. The simple act of implementing a sensor in municipal waste bins to send a message when they need to be emptied both saves money and improves waste management in cities like Barcelona.

One of the earlier vendors providing software for cityscapes is CityZenith, which originally had the rather eccentric name of Screampoint. When they first launched, here were many sceptics, but the explosion of the IoT has changed attitudes. Their Smart World platform is already being used for projects in over 100 cities including Chicago and London.
Their latest software platform, 5D Smart City, has been adopted for use in developing Amaravati in India. This is an ideal digital twin concept because the physical city has yet to be developed.

Long before the concept of smart city platforms, cities were using GIS to represent and understand their environment and ecosystems.

Some of the Players

Companies such as ESRI have been assisting cities in mapping for decades; they are now uniquely positioned to take them further. In an article written for Banque Paribas, David Jonglez, Business Development Director for ESRI France, discusses how mid-sized cities are in the forefront when it comes to digital twins, and mentions the coastal and port cities of Cannes, Le Havre and Brest. However, Paris, despite its size, is embarking on a digital twin initiative, which is planned to take up to 2024, but will already have a prototype in place in the next few months.

Autodesk has teamed up with ESRI to ensure that their BIM software integrates with ESRI’s ArcGIS to assist cities in merging the past and future built environment with the geographical layout, accelerating the formation of a digital twin.

One of the chief exponents of digital twinning is Dassault, who teamed up with Singapore to create “Virtual Singapore”. Prior to that, in 2013, they acquired a 3D GIS modelling company in Rennes, called Archivideo, and using the GIS software combined with their own PLM lifecycle management software to provide the platform for a digital city, using Rennes as their proof of concept for “3DExperiencity”, their digital twin platform. Their Geovia produuct, while i can be used for a variety of industries, such as mining, has been designed to help capture the digital identity of the city. Dassault claims that Geovia helps break down the data silos within municipal IT, thus assisting city planners and engineers to predict and simulate events and plan mitigations against their occurrence.

Microsoft has gradually been extending its capabilities in the world of IoT, using Azure as the platform for IoT management. It now has taken this a stage further with its Azure Digital Twins product, released recently.

Source: Microsoft blog – https://blogs.microsoft.com/iot/2018/09/24/announcing-azure-digital-twins-create-digital-replicas-of-spaces-and-infrastructure-using-cloud-ai-and-iot/

Cities can now pick and choose from their favourite vendor when looking for a digital twin platform, often partnering with the vendor to refine the product to suit their needs. Digital twins is a rapidly growing market, it is expected to grow globally by almost 38 percent annually, reaching $15.7 billion by 2023, according to MarketsandMarkets research. A few of the cities that have already built, or are in the process of building twins are mentioned below.

Virtual Singapore

While Singapore is classified as a Smart City, it is actually a Smart Island. One of the benefits of being a smart island is that the perimeters of your twins are clearly determined by the sea. This $70-million plus digital sibling has been developed by Singapore, in collaboration with Dassault to produce a central platform where all the disparate modelling done by different government agencies has a common home and a common look and feel.  In order to feed the digital twin, Singapore needs pervasive IoT to feed Virtual Singapore and has put a number of initiatives in place, notably a SigFox network that covers 95% of the island. The main stumbling block when it comes to IoT is that there is no common protocol and each supplier has their own approach. Vivian Balakrishnan, Minister of Foreign Affairs and Minister-in-charge of the Smart Nation Programme Office, describes this as “walled gardens”. “Every big IT company wants to create behind its own wall a unique ecosystem, and is trying to lock us in” – a sentiment probably shared by everyone who depends on software of any sort to conduct their business. Under his oversight, Singapore continues to push for an open standard and has published four standards to date for IoT required for the island state.

Boston – Stop Casting Shade

Modelling their city is not a new concept in Boston; in the 1980s the Boston Planning & Development Agency (BPDA) built their first model in wood. Today, with the assistance of ESRI, they have crafted a digital model. Its primary focus is on shadows caused by new developments on Boston Common, the oldest park in the US and beloved by Boston’s citizenry. There is actually a law governing how much shade can be cast by buildings and the twin helps decide positioning and the number of stories of any new building. By the way, the wooden model still exists and is still in use.

India – Cities Old and New

Jaipur – No Google Drive here, Please

Impressed by Singapore’s virtual city, Jaipur have embarked on their own digital twin initiative. Jaipur was one of the cities who did not permit Google to map their city, citing security constraints, and have come up with their own method of capturing data for their model by using LiDAR backpacks. Seeing how successful the collaboration was between Singapore and Dassault, they also opted to go with the French engineering software giant. The intent is to help with city planning; the only roadblocks are Indian bureaucracy, which tend to slow things up. For instance, flyovers to assist in mapping experienced several months delay waiting for approval.

Amaravati – Starting from the Ground Up

Both China and India have a huge population problem. In order to keep up with the expected growth, China requires 200 new cities and India estimates that they will need 100 new cities. Although India’s new city initiative is being hampered by red tape, Amaravati is the hope for the future. Currently a rural district and home to a pilgrimage site, the new city is envisaged to be the smartest of cities, and will be built from the digital twin, which will be the first-born. This is a very rational way to approach new city development and the outcomes are keenly anticipated. How many years it will take to achieve the dream are very uncertain at this stage. Cityzenith will assist in the mapping.

A Digital Twin City is Just What you Want it to Be

Just as manufacturers are leveraging digital twins for better outcomes in specific areas of product development, the digital twin for a city need not be a complete clone of the physical city; it can just be a digital manifestation of an aspect of city life. The city of Newcastle in England is building a digital twin for predictive risk management. An event in 2012, called the “Toon Monsoon”, where a freak rainstorm overwhelmed the city’s drainage system and cost millions of pounds of damage, was the spur for building a digital city for predicting and mitigating such risks in the future. It is predicted that risk management will be the major focus of cities when adopting digital twins, as climate change is creating new challenges and risks globally.

As the market matures, it is possible that we will see the rise of more siblings, where some cities will have digital quintuplets or more, each of which communicates and interacts with the physical twin and each other, but focuses on a particular problem.

The Rise of the Embedded License

Embedded licenses are not new, but they are becoming a vital mechanism in this digital age where hardware and software products are merging into a single offering. We are all used to purchasing a desktop or laptop with a pre-loaded operating system and office software, where we see the software as part of the deal. This approach is extending to everything in our connected world. Smart homes and the devices they contain, wearable devices and smartphones are just some manifestations of the blending of hardware and software. When we download an app to our phone from the Apple or Google store, we don’t think twice about the licensing implications, the app may even be free, and is monetized by carrying ads that we accept in return for not paying for the app. Intelligent refrigerators and washing machines are commonplace; we wear fitbits to measure our vital signs for health and sporting measurements. All of these devices require some software to fulfil their purpose, but, as a consumer, we do not think of the software as being separate from the hardware; that is, until it malfunctions.

Traditional concurrent or dedicated software licenses are not the right vehicle for measuring compliance or checking on entitlement, and this is why embedded licenses are coming into their own. Another key factor in the adoption of embedded licenses is the growth of virtualization and cloud computing. If a user is employing licensed software on a virtual device, or working in the cloud, conventional licenses may not be the answer.

How the Embedded License Assists Device Manufacturers

The real value of an embedded license for a device manufacturer is in its capability to tailor the entitlements and features associated with devices down to an individual level. This enables the device manufacturer to cut down on the number of variants and models of a particular device, because these can be controlled via the licensing software. For instance, let us say a company manufactures a sensor for water measurement, which can measure:-

  • PH levels
  • Oxygen carrying capacity
  • Water temperature at 1 meter
  • Water surface temperature
  • CO2 levels
  • Methane Levels
  • E Coli prevalence
  • and 20 other permutations.

The customers for this sensor will want to measure some of the variables, but maybe not all of them, while they may have a specific requirement that is not currently measured. Instead of producing an array of sensors that fit the customer’s requirement (and having the maintenance overhead of keeping the specs on that model for future orders) the features that are needed are provided, and those to which the customer is not entitled are excluded by the embedded license. The extra features can always be added by modifying the license. In addition, any software upgrades that need to be applied are managed automatically by the embedded license. The vendor needs to manufacture only one, or possibly a few sensor models and can rely on the flexibility provided by the embedded license to tailor the product for the customer, right down to individual devices and users, if required.

Other Benefits of the Embedded License

Added Security

In order to protect the embedded license from cyber threats, as well as prevent unauthorised use of the software the license is managing, it will generally have security features installed that block hacking attempts. Not only does this protect the license, it also assists in protecting the vendor application(s) embedded in the device. One of the major suppliers of embedded licenses is Gemalto, specialists in cyber protection. Flexera’s embedded license product also features encryption and what they call “code obfuscation”.

Long Term Support and Availability

Purchasers of embedded licenses often get superior product support. For example, Microsoft guarantees a life of at least 15 years for all products sold via the Windows Embedded Channel, a benefit not extended to purchasers of other license types. Users of legacy products such as NT 4.0 can still rely on product support through the Embedded Channel, although it has passed its sunset date. The embedded license also ensures that upgrades are applied as and when needed, without impacting the customer.

Engage with More Environments and Operating Systems

The embedded license is very versatile and most license management companies have ensured that it can be used for a variety of operating systems, including mobile and open source. Where it is especially useful is virtual environments, such as the cloud, and can recognize virtual CPUs and check on their validity, rejecting virtual clones and other threats.

Take Advantage of more Licensing Models

In order to engage as many customers as possible, the more license options that are available, the better. Apart from traditional subscription and purchased models, the device manufacturer can provide pay-per-use licenses. These licenses can be very granular and identify and differentiate usage per feature.

Proactive Management and Predictive Analytics

An embedded licence functions pretty much in the same way as an IoT device, in that it sends data back to the licensor in real or near time. This data can be harnessed to better understand how the hardware and software is being used, which can be analysed in turn to identify new products and markets.

Licensing in the Future

The main license management organizations have recognised that license management needs to be more automated and more responsive to licensed customers’ individual needs. End customers do not want to spend their days managing a variety of licenses, worrying about costs, optimization, upgrades and renewals. They also do not want the threats of non-compliance hanging over their heads, especially when the “user” is a device, rather than a human.

Device manufacturers want to monetize and protect the software they provide with their devices, as well as manage their customer base. Ease of upgrades is facilitated via embedded licenses and data is provided that helps the company refine their offerings and identify new opportunities. Most of these organizations have been on the receiving end of license management for software products they use daily, such as CAD and PLM, so they have a keen understanding of what licensing features work best both for them and their customers. Where the embedded license is offered as a system development kit (SDK), they have the ability to tailor new and interesting license models.

End users of the embedded licenses may welcome their flexibility, but they now have a more complex licensing landscape, with a blend of perpetual, subscription, pay-as-you-go and other license types. This is where OpenLM can assist, as it recognises embedded licenses and their features in addition to the other traditional licenses, and can provide comprehensive management and reporting of these disparate license types across vendors and products, providing an easy-to-use single interface. Consult with our support team on how OpenLM can make your license management and administration simpler and more effective.

OpenLM Java policy 2018-2019

General

OpenLM is using Java infrastructure for the following components for on-premise installation :

  • OpenLM Broker (License Manager Agent)
  • OpenLM Applications Manager
  • OpenLM Router
  • OpenLM Reports Scheduler

Currently all these components use Oracle Java 8 as infrastructure. The infrastructure is distributed with OpenLM installer.

Oracle has announced that, effective January 2019, Java SE 8 public updates will no longer be available for “Business, Commercial or Production use” without a commercial license. This will effect OpenLM customers and the purpose of this document is to explain OpenLM policy in regards to this change.

OpenLM components version 4.4 and earlier

Version 4.4 of OpenLM is the current (Dec 2018) version of OpenLM. We are planning to release version 4.5 of OpenLM during the first quarter of 2019.

OpenLM version 4.4 Java software installer also installs version 8 of Oracle Java.

Statements

  • Customers that are using any OpenLM Component that is running on Oracle Java version 8 can continue and use it until we release of the next version of OpenLM.
  • Oracle will not provide any public updates to Java 8 after 2018. Customers need to take that into account when considering the security of their systems.
  • OpenLM is planning to release version 4.5 of OpenLM components on the first quarter of 2019.

OpenLM components version 4.5 and higher

Version 4.4 of OpenLM is the current (Dec 2018) version of OpenLM. We are planning to release version 4.5 of OpenLM during the first quarter of 2019.

We plan to release OpenLM components version 4.5  with OpenJDK version 11 which is a fork of the original Java. OpenJDK will replace Oracle Java that was distributed with our products.

Statements

  • The use of OpenJDK Java will allow customers to continue and use OpenLM Components without the need to pay royalties to Oracle.
  • OpenLM is doing efforts to keep the distributed OpenJDK infrastructure updated but it is customer responsibility to keep the infrastructure updated.
  • OpenLM is planning to support both Oracle Java and OpenJDK Java.
  • OpenLM will support the switch between installed Java versions so the customer will be able to configure OpenLM to use a different version of Java that is installed on the workstation. This will allow the customer to switch from using the provided OpenJDK Java to Oracle Java.
  • OpenLM is planning to offer Oracle Java infrastructure as part of OpenLM Component for an additional fee. Such license will be limited to running OpenLM Software only, not any other Java software that might be installed on the same machine.

 

References

Oracle announcement:  https://www.oracle.com/corporate/pressrelease/java-se-subscription-offering-062118.html

OpenJDK Site: https://openjdk.java.net/

OpenJDK License with classpass exception: https://openjdk.java.net/legal/gplv2+ce.html

How the Internet of Things has changed Software Licensing

We are accustomed to buying one or more copies of a software product from a vendor and paying a license fee for the privilege of using it. Usually, accessing such licenses is based on the prospective user rather than the device on which he is working, but licenses can be linked to a specific device either via software or through a physical mechanism such as a dongle or USB stick. There are also embedded licenses, which are deployed in a device, such as a laptop with Microsoft Windows. While embedded licenses are not a new concept, they are going to become ubiquitous in the universe of the Internet of Things (IoT). Estimations of how many devices will be on stream by 2020 vary widely, but a conservative estimate is 20 billion (Gartner Group). Each and every one of these devices will be gathering and transmitting data, creating immense opportunities for those who enter this market. A survey by ZDNet’s Tech Pro Research found that 65% of companies have already implemented IoT strategies or are planning to do so in the near future. What is holding back even more growth in this ecosystem are issues such as securing and monetizing the devices.

The Evolution of IoT

The use of sensors in devices and products is not new. Take motor racing for example. McLaren has been in Formula One racing for decades, and they use up to 300 sensors in a vehicle to understand what is happening in a vehicle on the track. The knowledge gained from analysing this data and using it to predict events has made them experts and created a business model where they are an IoT company.

The devices can be very complex, and surprising new products are emerging from companies such as John Deere. Their tractors and other agricultural machines use sensors to make plowing and planting seeds more efficient, but they now also provide agricultural scientific information via tablets that analyse soil quality as part of the package. They even analyse manure quality being spread on fields where sustainable fertilization is being used. Every industry has the potential to come up with innovative ideas on how to use IoT. The trick is to make it profitable and sustainable.

We are All Software Companies

“The notion that there is huge difference between the industrial world and the software world is no longer valid, those days are over. In today’s world, everything is software”

Jeffrey Immelt

CEO of General Electric

 

While we mentioned that 65% of companies are either immersed in, or starting to enter the IoT universe, the hardware is only a small part of building an IoT

The billions of devices using M2M (machine-to-machine) technology to collect and transmit data all have something in common; they need software that manages how and when they collect this data and, depending on their complexity, whether they perform some pre-processing on this data. This means that the management of these devices is critical.  Security is a big headache; there is no global standard for IoT security, although the IEEE is working on it, security is pretty much up to what the manufacturer decides is appropriate. Side by side with security concerns is the management of the software used in and around the devices. This is where license management is so important.

License Management for IoT

Management of IoT licenses needs to be both customer-centric and easy to administer. Upgrades and fixed to software must be delivered seamlessly and timeously. It is critical to know the status of any one device with respect to versioning and features installed. To do this embedded licenses are required. An embedded license is leaner and meaner than traditional software licenses, with a smaller footprint. It manages traditional compliance, but also controls entitlement at a customer and even a device level.

The granularity of entitlement management defines what features are compliant. A user may have access to a license in a concurrent pool, but they are only entitled to use standard features. Use of advanced features is a breach of compliance. The need to manage entitlement has resulted in many organizations investing in License Allocation Management (LAM) software, so that they can manage access on a single user or device level.

Gartner Group calls this management system an LEM system – License and Entitlement Management. They also predict that not putting an LEM system in place can have dire consequences.

“By 2022, a failure to put in place a license and entitlement management (LEM) system will result in a 30% loss of potential revenue generated from software for device manufacturers connecting to the Internet of Things (IoT) universe”

Gartner, July 2017

Licenses for every Device

What this means both for suppliers and users of IoT devices, is that the number of licenses to be managed down to device level will expand exponentially. Take for example, a wearable device in healthcare. That device could be reporting on a whole series of the patient’s vital signs, from blood sugar levels to cardiac rhythms, using different software to analyse the data. Which software is enabled and entitled on the device must be recorded. Then this data, partially analysed or raw, is transmitted up the line, probably to an edge computer, which again will be subject to a bundle of licenses. Most edge computers perform additional pre-processing before transmitting the data and information up stream to either an on-site central computer or a cloud environment.

This is why license management in the world of the IoT is a new threshold. While the embedded licenses have been designed with a refreshing focus on the customer, which is essential for proper reporting on entitlement, such as is provided by Gemalto, for example; the customer needs to reassess if their license management and administration is in line with the new rules of software monetization. This is why our existing customers are using our OpenLM LAM product. We designed this product in response to requests from organizations who were not our customers, but were having problems finding a product that managed both licenses and entitlement.

 

Is your License Management Flying below your Risk Manager’s Radar?

Most organizations have a well-developed risk management practice. The most mature organizations practise enterprise risk management, which is process-based and cross-functional. Other companies are still on their way there, but do at least manage operational risk and project risk. Within these companies, most IT business units practice IT asset management (ITAM) and software asset management (SAM). What is disturbing is that SAM risks are generally missing from the organizational risk register, and are only visible at IT level, or come under annual scrutiny at license renewal time. What can happen under these circumstances is that an audit by the software vendor can identify non-compliance and make a huge hole in the company’s annual revenue. We are not talking small or medium businesses here, although they are also at risk.

SAP on the Warpath

When SAP saw its revenues flagging, a decision was made to tighten up on compliance.  It decided that APIs that allowed other software such as Salesforce to access the SAP database were “users” and were breaching their agreements with customers. It confronted some of its largest customers, like Diageo and AB (Annheuser Busch)-InBev and won. The claim against AB-InBev was for $600-million – even the world’s biggest brewer cannot afford to cough up such a totally unexpected and unbudgeted expense. There was an out-of-court settlement, which would have been at a lower sum, but it would still be material enough to feature in the next annual report.

SAP’s aggressive policy is open to dispute, and Diageo recently won an appeal against the judgement passed in 2017, but it raises some serious questions. If these massive organizations cannot manage their compliance effectively, what hope is there for the rest of us? The next question is whether the risk of non-compliance is listed as an organizational risk, and not merely the CIO’s nightmare?

It is not Just about Compliance

While every CFO understands licensing issues around SAP, Oracle, Microsoft and Adobe, because this software is used throughout the organization, they are often in blissful ignorance of the same threats that specialized engineering and scientific software represent.

  • the licensing costs per user are usually very high, so overspending is easy
  • some of the products are not managed by the IT department, but rather by the engineers and researchers who use them, such as network planners, transmission engineers and even environmental impact assessors in an energy company. They may even be in the hands of third parties.
  • The software vendor provides the licensing software that estimates how much the company owes (a case of the wolf watching the sheep).
  • Asset management policies are often not in place or monitored.
  • Good license administrators are hard to find.
  • Major vendors are discontinuing perpetual licenses, which have always been the cost-efficient way to minimize costs and maximize productivity.
  • Digital disruption is bringing new complications to licensing. This includes cloud computing and SaaS, virtualization, BYOD (bring your own device), the IoT and artificial intelligence.

While most of these issues appear to be something that can be relegated to IT, in fact, each of them can affect the bottom line. While they can be managed by IT, understanding these risks and their mitigations is critical at executive and even at board level. After all, most companies are totally reliant on proprietary software to function on a daily basis. A dispute which invalidates all the CAD licenses and removes access in a manufacturing organization would cripple it.

What Should be in Every Risk Register

Each one of the items listed above is a discussion in itself, but here are a few risks we believe should be listed in every company risk register and actively monitored by the CRO.

  • Risk – We do not manage and monitor compliance for every one of our software assets.
  • Implications – financial and reputational risk
  • Mitigation – fix this. If you don’t believe that there are companies who are in this position, Gartner ran a webinar on ITAM risk management and 10% of the audience admitted to not only not managing compliance, they were not even planning for it. And while 40% of the audience had an asset management strategy in place and working, the rest of the audience were still working on it.

There is no quick fix, as all the following risks contribute to the overall vulnerability.

  • Risk – There is no IT asset management policy in place
  • Implications – financial, cyber and governance risk
  • Mitigation – Structure a policy that covers all types of computing, from on-site to cloud and mobile, and implement the processes that support and monitor adherence. Train all employees and create awareness, as well as imposing penalties for infringements.

 

  • Risk – We do not have centralized control of our software licenses.
  • Implications – financial, compliance and operational risk
  • Mitigation – Try and centralize control as much as possible, although this can be n issue for multinationals. At least ensure that the asset register is complete.

 

  • Risk – We do not know if we are using all our licenses to their maximum potential
  • Implications – financial and operational (productivity) risk
  • Mitigation – Become active in license management, with centralized control and your own license administration and management which you can use as a yardstick against vendors’ claims.

 

  • Risk – One or more of our vendors is sunsetting perpetual licensing
  • Implications – financial – subscription licensing on average is 1.8 times more expensive than perpetual licensing (Gartner), business continuity.
  • Mitigation – Decide whether to remain on perpetual licensing, move to subscription licensing or discontinue the relationship and move to another vendor.

 

  • Risk – We do not understand the implications of all the new digital models.
  • Implications – could be anything from financial risk to business continuity.
  • Mitigation – Get to grips with what impact digital disruption will have on your licensing costs and compliance risk (it does not go away just because you are using a browser)

Building a Proactive Approach.

We mentioned above that 10% of the audience had no ITAM strategy in place. What was even more disturbing is that in the same audience, 24% of participants said they had no SAM tools in place.  This does question how effective their ITAM strategies were, even if they were still being implemented. There is no way that software licenses can be managed effectively without a good license management application. The license managers supplied by vendors were written with the vendor’s interests in mind, and focus on compliance. When the same audience were quizzed on their primary reason for asset management, only 27% mentioned compliance; 54% of the audience wanted to optimize their license usage. For that you need a license management application that will help you realise your objectives. This is why we at OpenLM founded our business, to help customers get the most out of their licenses.  It started with ArcGIS, but now we can help you with thousands of engineering and scientific and engineering applications from the world’s leading vendors. Not only do we have licensing management software, we offer consulting, support and outsourcing services to help you simplify license management. Take a trial of our software or ask to speak to a consultant, license management is our passion!

Solidworks – Which Licenses Should we Get?

The trend to subscription licensing started by Adobe, is a concern for organizations that use engineering and scientific software. The licensing costs for these applications eat big chunks from the IT software budget, but the tools are essential to the business as a going concern. To best manage costs, companies have traditionally purchased perpetual licenses, based on a maximum number of concurrent users, rather than license-per-user models. However, some software vendors have seen Adobe’s success, admittedly after an initial drop in earnings. The temptation of a steady monthly revenue stream is also far more attractive that the peaks and troughs of annual renewals.  Some vendors have taken the plunge: ESRI got massive pushback from their users when they tried to impose a subscription model and had to adjust their thinking in order to appease their customers. Autodesk is unrelenting – they are determined to phase out all perpetual licensing, and time will tell how this strategy works.

Solidworks New Licensing Strategy

Dassault’s Solidworks subsidiary has been watching developments and has also entered the subscription versus perpetual licensing fray. However, they have kept options open for their customers by offering as much flexibility as possible. In view of their product portfolio, this makes sense. While computer-aided-engineering (CAE) products could be software that a company uses on occasion, a full product lifecycle management  (PLM) suite is obviously a long-term investment and a perpetual license would make more sense.

In order to make subscription licensing more attractive, as well as more affordable for small and medium enterprises (SMEs), Solidworks offer a 3-month subscription model, rather than locking the customer in for a full year. This would make sense where a steel engineering company has designed a product that requires plastic molding, for instance. The Solidworks Plastics application is dedicated to designing injection molds for plastic products, and if this is a once-off design by the company, they can opt of the three-month subscription to get their product to market without having Plastics lying on the shelf for another nine months.

Existing and potential customers are sitting up and taking note; however many of them are asking for a one-month license too. Whether Solidworks decides to add this to their offerings remains to be seen.

The Thinking behind the Strategy

Solidworks CAD is the leading 3D CAD software, but it comes with a $4000 price tag for one perpetual license. Large corporations can manage this, and where their user to license ratio is over 2:1, this is the best priced and easiest to manage option. The same does not hold true for small and medium businesses, where the high upfront price makes these companies purchase competitor products. The subscription license removes much of the barrier to entry and can bring in new customers who balk at the perpetual cost, but can afford a 12-month subscription, or even put their toes in the water with a three-month subscription.

What gives Solidworks the edge in this circumstance is their extensive academic reach. They have built a large footprint of schools, colleges and universities that have Solidworks on campus and made it engaging for students by offering certification and work-anywhere options. So, when the student is no longer a student, but in business, they are comfortable with the product and don’t have the learning curve that investing in a competitor product will bring.

Another incentive to invest in Solidworks is their Entrepreneurship Program, which assists small startups and entrepreneurs to get going via partnerships with a large community of incubators and accelerators.

Clearly, these strategies are all aimed towards building market share in the long-term, but they are far more customer-centric that Autodesk’s uncompromising approach.

The Problems with Subscription Options

The main problem with a subscription option is that it is not a long-term or lifetime relationship. It is fine while it lasts, but what happens when the break-up comes? If the subscription was cloud-based, what happens to your drawings and models? They are your intellectual property, but how are they going to be returned to you and which file formats will be used?

This is something Peter Rucinski, SOLIDWORKS Director of Product Portfolio Management, points out in engineering.com, giving the analogy that it would be like asking for your color prints back, but getting black-and-white images instead. 3D imaging is rich and complex and it could be hard to get back your full intellectual property as you designed it.

This should not be the make-or-break factor in deciding which software to purchase, but the implications should be thought through carefully.

Rent or Buy – Find the Best Fit

Clearly, the decision is dependent on your own business model. Any software that supports a core competence needs a long-term relationship, and the perpetual model is the best fit if you have a medium to large number of users.  Where you only have a few users, the subscription license is probably the most affordable option, although you will still need to monitor usage to keep costs down.

If you have a situation where you need to design and build a once-off product that is not part of your normal line of business, the 3-month subscription can work, remembering that the software is unavailable once the period expires, although you will have your drawings, models or tests and simulations. However, you are always welcome to subscribe again.  Solidworks tries to offer the most flexible options to customers, so a hybrid solution with a mix of perpetual and subscription licenses on-site or in the cloud is perfectly viable. You may need help with managing this hybrid option, which is where OpenLM can help you keep costs and productivity optimized. Solidworks are really trying to reach the widest target market audience possible, and have created a new app suite that definitely steals a march on their competitors.

You are Never too Young for Solidworks

Well, that is not quite true, if you are under 4 years old, the following does not apply. Following on the successes gained by focusing on schools and universities, which is where the customers of the future come from, Solidworks has taken the Jesuit saying to heart

Give me the child for the first seven years and I will give you the man.”

Although this saying is attributed to Loyola, and is probably apocryphal, it has elements of truth to it.

So Solidworks have launched a new product in beta called “Solidworks Apps for Kids”. According to Solidworks, this product is aimed for kids from 4 to 14, but can be accessed by kids of all ages. This is a great opportunity for children to get immersed in STEM learning as early as possible. The beta mode is free; it remains to be seen if it will be monetized at a later stage, but in the interim, why not introduce your kids to it, or even better, indulge the kid in yourself!