A London Stock Exchange announcement says UK construction collaboration technology vendor Asite has “entered into a three year agreement with Laing O’Rourke based on Asite’s new user-based licensing model”.
The announcement talks about how Laing O’Rourke has been using Asite since 2004 and how it will use Asite to manage sourcing, collaboration, and electronic trading processes. Given that Laing O’Rourke is an investor and shareholder in Asite (it had a 1.7% shareholding in 2003, prior to the granting of options that September over a further 17m shares) – it’s hardly surprising that they’ve signed a contract.
The licensing conundrum
The announcement goes on to claim: “The new licensing model dramatically reduces the cost per project of the services and encourages the proactive use of the solutions throughout the supply chain”. Asite CEO Tony Ryan says the new licensing model “will make the use of collaboration technology a given regardless of the size of the project”. (Asite was talking about extending user-based licensing across its products last April.)
I am not sure how user-based licensing will encourage take-up of collaboration solutions throughout the supply chain. In a highly cost-conscious industry like construction many firms look to make economies wherever they can, and software usage will be no exception. Some firms faced with paying for multiple user licenses may decide they can get by with fewer, perhaps allowing users to share logins (immediately undermining any underlying audit trail showing who did what and when). An alternative and widely employed approach is project-based licensing of construction collaboration software, allowing use of the software by all authorised project team members, regardless of the number of users. This system – which can also be applied across programmes (eg: framework agreements) and enterprises – does not constrain take-up at the user level; on the contrary, it encourages collaboration.
(As an aside, isn’t this system also more in keeping with the collaborative nature of Web 2.0/SaaS – see previous post – while user-based licensing grew to support delivery of conventional software?)
Much will depend on the license cost per user, of course. Maybe Laing O’Rourke found project- or enterprise-based licensing too expensive? Certainly, according to the Asite announcement, the main benefit of this deal is a ‘dramatic reduction in the cost per project of the services’, so perhaps the bottom line is that Laing O’Rourke has simply negotiated a cheaper rate for using Asite?