Asigra Intros Unlimited Use Subscription Licensing For Data Protection
Cloud data protection technology developer Asigra Wednesday unveiled a new licensing plan for its software that lets channel partners lock in their total licensing costs over a three-year period even as the total number of licenses their customers use rises.
The new pricing model, called the Unlimited Use Subscription License, does two things, said Eran Farajun, executive vice president of the Toronto, Ontario-based company.
"Most important, it gooses partners' margins," Farajun told CRN. "Also, it gives them pricing clarity and predictability."
The Unlimited Use Subscription License bases a service provider's licensing costs on historical usage, Farajun said. The total cost of the service provider's licenses are determined up front for the next three years so that as partners grow their subscription base, they know they will not be paying extra for the new licenses.
"We negotiate with partners a modest year-to-year growth percentage," he said. "Think, as an example, 10 percent, 15 percent, 20 percent growth over three years. It could be more or less. If the partner's business grows above that, there's zero additional licensing cost to partners."
The actual negotiated growth rate over three years is expected to be reasonable and a number partners can overachieve, Farajun said.
"If a partner says it expects a 2 percent growth in year one, a 3 percent growth in year two, and a 4 percent growth in year three, we know that data is growing much higher than that," he said. "We're looking at a good-faith exercise."
The point of the negotiated growth in total annual licensing costs is to provide partners with clear, predictable pricing for 36 months, Farajun said.
"Any growth they see in Asigra business above the negotiated increase is at zero margin," he said. "Partners' costs are capped."
There are few partners for whom the Unlimited Use Subscription License model might not work, Farajun said.
"Partners who are not seeing growth in storage, for example," he said. "But if that's the case, maybe they are not in the right business."
The Unlimited Use Subscription License model is also available to partners who resell the Asigra software, Farajun said.
Asigra has nearly 1,000 channel partners worldwide.
“We will have [conversations with partners] when license renewals are up. And for partners who recently signed new licensing agreements with Asigra and who may wonder why we didn't tell them about the new program, we will talk with them. Any extra money they may have paid since their renewal may be used as negotiated credit for a new deal."
While negotiating the license costs for three years up front could have some impact on Asigra revenue, Farajun said that is not a concern.
"We're a profitable company," he said. "We have no debt, and no investors that own some percentage of the company. We're private. We operate in a responsible way. If partners want to make more money, great."
There is much to like about having a relatively flat licensing cost for three years, said Leroy Ladyzhensky, principal at Integrated Network Concepts, a Cleveland-based solution provider and managed service provider that has worked with Asigra for about six years.
"We will be knowing that if we consume more licenses, we won't get charged more," Ladyzhensky told CRN. "We know what the minimum margins will be and how our margins will grow as our business grows."
Ladyzhensky said his company did the math, and the new Unlimited Use Subscription License program makes perfect sense.
"After partnering with Asigra for six years, we can see the historical trends each quarter," he said. "For our bottom line, at the very minimum, the growth won't change. If we do what we need to do to accelerate growth, that growth goes to the bottom line. It will incentivize us to accelerate our use of the Asigra product."
This is not the first time that Asigra pioneered new licensing models.
Asigra in 2013 introduced the Asigra Recovery License Model under which the company and its partners charged a per-Gbyte monthly fee that was much lower than the industry norm, along with extra charges for recovering data based on the amount recovered. In this model, customers who did not need to recover data or who recovered a minimum amount of data were rewarded.
That was a successful program, and is still available to partners, Farajun said. However, he said he expects most partners to move to the Unlimited Use Subscription License program.
The company in late 2017 also introduced what it called the Partner Acceleration Program but referred to internally as the "Half Of" program under which it would guarantee customers who switched to Asigra would pay half the cost of what their previous provider charged, with certain exceptions such as free data protection products.