Fast makes switch to mediator role

Lovelock: vendors need to work with software buyers to sort out revenue streams

Software industry pressure group the Federation against Software Theft (Fast) is undergoing a fundamental change in strategy ­ reflecting wider changes in business software investments.

As recently as 2005 Fast’s primary role was to put pressure on businesses to ensure their licences were in order. In a paper at the time it cited director-level complacency as a cause of piracy, warning of their liability and threatening that cases could end up in court.

Now the group wants to take a more conciliatory role.

Changes in technology are leading to a shift in the balance of power between software users and vendors, according to John Lovelock, chief executive of Fast.

The advent of technologies such as virtualisation, software as a service (SaaS) and software metering systems mean that licensing models are changing.

Previously business software updates often coincided with hardware refreshes. Now companies can pay a vendor to maintain the software on a month-by-month basis, or install metering tools to measure exact use and pay accordingly.

Lovelock said this means vendors cannot “sell and run,” though he maintains that users must be more open about allowing the supplier into their business environment.

“In the past businesses buying software have been wary of inviting a vendor in to do a refresh for fear they will be given a hard sell ­ this must change,” he said.

The issue is becoming a battleground ­ in February this year the National Consumer Council attacked software vendors for misleading consumers over software licences and asked the Office of Fair Trading to investigate.

And in 2007 the Business Software Alliance vowed to combat online software fraud more assertively.

Lovelock now has a stark warning for the industry. He said software makers must avoid the fate of the music industry, which failed to acknowledge changing revenue models and is now paying the price.

The British Phonographic Industry estimates £1.1bn has been lost over the past three years to illegal downloading ­ and the problem is getting worse.

“You need to work with those buying your products to get revenue streams sorted out as early as possible,” said Lovelock.

Ray Wang, software industry analyst at Forrester Research, said software developers are being forced to become increasingly flexible with their licensing models to comply with large companies’ demands.

“There is a now a preference for use-based licensing,” he said. “Vendors face pressure to enforce policy to maintain margins and to demonstrate flexibility.”