From bespoke code to customisable off the shelf software (COTS), we are now seeing a shift to the wonderful world of Software as a Service (SaaS). Everything is available on subscription these days, from Netflix to car rental, meal preparation kits to video games. Almost everything is available on-demand and supplied on a subscription based service.
Typically subscription services are exclusively cloud based, they allow access to a product which constantly evolves, with new features or services being released as and when they are made available. But no need to be concerned, AVEVA's licencing model can be subscription based and still located on the plant floor, we’re not talking about control from the cloud here. What we are talking about is the ability to access a hybrid cloud and site based licencing model with access to data analytics solutions which, as of now, are only available in the cloud.
It’s interesting how often I speak to senior engineers, both with the System Integrators I work with, and the end users I meet, that when “subscription licencing” is suggested, the response can often be “I don’t think they are ready for that yet” or, “I don’t think it’s right for this project”.
I often wonder if the question has actually been posed to the customer, or indeed that folks' own preconceptions of what is best for customers is based on previous negative experiences, from a different time period. And possibly based on a personal experience rather than considering a client's needs.
We are seeing the demand for subscription licence uptake rise at a rate that is much faster than we anticipated. The transition period over the next 5 - 10 years is going to be critical, those companies that set aside their human biases and embrace next generation software, industry 4.0, and Digital Transformation will be able to leverage vast advantages over their competition. The SIs that enable them to quickly make this transition will be the ones that prosper.
We will look at the details of just some of those advantages later. My advice would be to always ask the customer what their wider strategy is in terms of subscription licencing - you might be surprised by the answer.
So what’s in it for the System Integrators when it comes to end user subscription-based licence models like AVEVA FLEX?
For one, the migration from perpetual licencing to subscription means a migration from high CAPEX costs, to lower, ongoing OPEX costs. The end result being that there will likely be more money available at the front end of a project for consultation and integration.
Secondly, there are fewer licencing restrictions with FLEX. No longer do you buy a historian with x tag capacity; now, you simply get access to AVEVA Historian, with no limitations on capacity. This opens up a world of possibility when considering architectural design decisions on tag heavy requirements, like Playback in AVEVA System Platform.
Thirdly, you gain access to the entire AVEVA portfolio. So trialling new products to see what value they offer the client will be a much lower overhead and much lower financial risk should it not work out. This opens up the prospect of the “motorway of consultancy” where your clients don’t have to go and ask for large CAPEX spend to trial a new piece of technology, they would only have to muster the cash to pay you for the engineering efforts to trial the functionality in question, set up a proof of value to prove its ROI and value, and then if successful, use those results to ramp up the development and justify further investment in engineering hours to cover the rollout.
The penultimate benefit is freedom from “value engineering” this is the long held practice of having to reduce the functionality or data capture of an application so that it fits within whatever licence size you may have purchased. If you have a 500 tag Historian then you need to store less than 500 tags, or face a hefty price tag to upgrade functionally to the next size up.
Finally for long term digital transformation projects, or projects with a long life cycle, it means you don’t have to settle on a particular version of the software or even a specific product for application development cycle that could last many years. This is critically important given the rate of technological change, and recently perfectly highlighted by the production of naval ships, the software of which the systems are based were obsolete by the time the ships hit the water.
Many System Integrators are already seeing the benefits of this shift, with “motorways of consultancy” and a much closer ongoing relationship with the end user. My advice would be not to discount subscription software licence models such as FLEX until you have spoken to your customer about the long term aspirations of the company. FLEX licencing could be the key to unlocking your clients' digital transformation potential.