In the ever-evolving landscape of technology partnerships, businesses are increasingly seeking software providers that align with their business goals and drive measurable outcomes. LigoLab’s CEO advocates for a shift towards performance-based software licensing, as opposed to the traditional per-seat model. The per-seat model, while common, is seen as outdated and problematic because it does not align the software provider’s incentives with the needs of the business.
Under the per-seat licensing model, software companies benefit financially from selling more licenses, regardless of actual usage. This can lead to misaligned incentives and increased costs for businesses, especially as they scale and need more licenses. Additionally, per-seat licensing can limit flexibility and scalability, forcing businesses to purchase extra seats for peak periods, resulting in wasted resources and potential inefficiencies.
In contrast, performance-based licensing ties software costs to business outcomes, such as increased productivity or cost savings. This model encourages software companies to focus on developing features that directly contribute to their customers’ success. Additionally, performance-based licensing offers transparency in software costs and adaptability to changing business needs, promoting a more flexible and efficient approach to software usage.
LigoLab’s CEO believes that the shift towards performance-based licensing is essential for modern enterprises, as it promotes a better alignment of incentives and encourages software companies to deliver genuine value through innovation and automation. This shift can help businesses become more competitive, agile, and cost-efficient in the digital age, positioning them as leaders in their industries. Ultimately, the performance-based model offers businesses greater control over their software usage and costs, allowing for growth and evolution based on actual business performance.
