It’s generally understood that traditional licensing models put forth by independent software vendors (ISVs) do not translate well to a cloud model. These node-locked and floating licensing models have been especially challenging for small and mid-size enterprises who lack the negotiating power of a big company. This is now changing: more and more ISVs have started to experiment with cloud computing and are adjusting their licensing models accordingly. At the ISC Cloud’12 Conference in Mannheim, Germany, September 24-25, four representatives from major ISVs ANSYS, CD-adapco, ESI, and SIMULIA will talk about their motivation to move to the cloud. They’ll also present their new licensing models and explain how they support them in the cloud, as well as highlight a few case studies from early customers.

Wolfgang Gentzsch, the chairman of the ISC Cloud Conference, in the following interview, has proposed one question to each of the participants – Sven Enger from CD-adapco, Wim Slagter from ANSYS, Matt Dunbar from SIMULIA, and Dominique Lefèbvre from ESI – to find out more about the ISVs’ new licensing models.

Wolfgang Gentzsch: Gentlemen, thank you very much for providing some insight into your new licensing models and strategy. We won’t disclose the entirety of your planned conference agendas here; however, we’d like to catch an early glimpse in order to raise interest and attract participants to the ISC Cloud conference. In all discussions about cloud computing and application licenses, the ISVs’ number one concern has been losing revenue when moving part of their business to the cloud. How did you convince your upper management to move to the cloud despite of this concern?

Wim Slagter, Lead Product Manager at ANSYS, Inc.: It wasn’t difficult at all to convince our upper management because cloud is really an evolution of the HPC space that ANSYS has been involved in long term, and our cloud strategy is fundamentally synonymous with our HPC strategy. From a historical perspective, ANSYS has had a consistent focus on the computing landscape from centralized computer centers in the early days, to distributed and local computing in the 90s, and now a return to centralized/ consolidated infrastructure and remote access. For each of these “periods” I can name a few examples of our HPC software investments. During the computer center days back in the 80s, we made significant investments in vector processing on mainframes and we already had timeshare computing agreements. Furthermore, we already released an ANSYS Remote Simulation facility back in 2004.

ANSYS has been focused on this constantly changing landscape for years – in our fundamental software architecture, in our solver scaling, in our user environment, and in our business, with support for remote or local hardware. So today’s ANSYS cloud story is really a continuation of a long term focus.

Sven Enger, Vice President for Worldwide Business Development at CD-adapco: CD-adapco’s cloud solution has only been an incremental continuation of the license offering we have had for quite some time, and there was no need therefore to convince our upper management. CD-adapco already offered a core-independent license scheme through the Power-Session. The natural next step was to offer a license that was still independent of the number of cores but based on the actual use, i.e., the wall clock time the license was used. This Power-On-Demand license covers all the requirements for cloud computing.

As soon as the user has been granted a repository of Power-On-Demand hours, he or she can manage the license independently through a Web interface. Here, license keys with duration and expiration time can be generated. It is up to the user where the hours should be spent: on a local machine, on a local cluster or on a cloud computer. Further, the user can decide to share the hours between e.g., subsidiaries, colleagues or projects.

Dominique Lefèbvre, head of product management for Virtual Performance, Manufacturing and Environment solutions at ESI Group: Similar business concerns were raised in the past when floating or network (LAN or WAN) licensing models were introduced. These did not translate in tangible loss of licensing revenues. Similarly cloud computing or on-demand computing should be viewed as a complementary licensing model to address our customer’s increasing demand for virtual prototyping and simulation.

So far, the experience of ESI Group has been limited to clearly identified business value. For instance, a vibro-acoustics customer routinely running Statistical Energy Analysis methods may not have the necessary hardware to run occasional large scale BEM models requiring large clusters of multiple cores. Similarly, some customers may need to run large multi-domain optimization models requiring the execution of multiple concurrent runs which exceeds their standard license limitations. In these situations, a standard license enforcement model is not applicable anymore. Instead, a pre-paid and time limited license allowing flexibility in the usage of computing resources and software capabilities is proposed, which can be used on internal clouds or proposed as external cloud solutions in collaboration with cloud providers.

Matt Dunbar, Chief Architect for SIMULIA: The Dassault Systemes management team has made a strong commitment to making the V6 product line available on the cloud, so management backing has not been a major issue for SIMULIA. While many within SIMULIA had the initial reaction that cloud computing looked very much like what was offered by CSC and others 20-25 years ago, the elasticity of computing resources on the cloud has driven interest. That said, management commitment has not necessarily eliminated the difficulties of coming up with a licensing model that is well adapted to the cloud. This is something that is still a work in progress for SIMULIA.

Fundamentally the key issue for SIMULIA is how to correctly license and price simulation software in a way that allows users to handle short computational peaks in which the volume of simulation may increase 10X for a period of 1-2 weeks. Currently licensing for SIMULIA requires that users have licenses that will handle their peak simulation loads purchased for a minimum of three months, but typically purchased on an annual basis. Driven by interest in the cloud, SIMULIA is currently developing a new licensing model that allows for more elastic usage of the software. We have looked at a number of different models from a strict “pay as you go” model to models that follow more of a subscription approach. Discussions about the model that makes the most sense for SIMULIA products are ongoing within Dassault Systemes, so more detailed description must wait until a later time.

Wolfgang Gentzsch: Thank you, everyone, for sharing these insights into your motivation to move to the cloud, as well as your thoughts on a licensing model for the cloud. We are looking forward to hearing more about your experience and customer use cases at the ISC Cloud Conference in Mannheim.

Join the ISC Cloud Conference to learn more about how these companies are navigating the changing computing landscape.