It’s been a few years since the debate started on software licensing. And the consensus appears to be that acquiring perpetual licenses is on a downward trend. (I guess it’s still too early to call for its eventual demise). Customers are demanding fast and easily measurable ROI on their enterprise software deployments; the software industry is responding with either open source or utility-pricing.

Moving toward utility-pricing is not surprising at a time when the IT industry is going through structural changes. It started first with Application Service Providers (ASPs) or On-Demand, which some like to call; which mutated later to a Software-as-a-Service (SaaS) model. And lately there’s another trend emerging: Cloud Computing for infrastructure with a completely new player as a leader – Amazon.

All most interesting and something we had thought about when we were architecting our then new Release 4.0 back in fall 2006. We incorporated the basics to deploy our software in a SaaS environment, or at least make it possible for Managed Service Providers (MSPs) to offer data management services using our product on a rental basis on a pay-as-you-go model. The software allows metered pricing and is multi-tenanted.

Over the last eighteen months, we have developed this further and built maturity to it and now we have begun offering on a utility-pricing model, with one key difference. For a utility, you pay more as your consumption grows even if it is sometimes on a reducing rate per unit. In our case, the more you archive the less you pay – in absolute terms.

It’s a pricing model we believe would be attractive in current economic conditions and would be trend setter for rest of the computing industry, perhaps even for the utilities.

For us, it provides a predictable and steady cash flow rather than a series of bell curves of peaks during Quarter-ends and troughs in between. Having doubled our market share in the last two years, we believe utility-pricing will help us double our market share again –this time in 12 months; but more importantly would offer our customers a predictable ROI with their operating budgets when getting capital budget approvals is getting increasingly difficult.