Successful software for materials modelling has an expected lifetime of many decades. This long-term nature requires a sound legal and business foundation: the ownership of software must be clearly established and the license models need to be carefully thought through to ensure a sustainable development and maintenance of the software and impactful exploitation by both academic and industrial end-users. Different business models carefully need to be considered when developing a strategy for long term sustainability of software and sustainment of the operation.
As background, the White Paper provides an overview of materials modelling software market, considering different segmentations (by value chain and by type of modelling) and briefly discusses market dynamics. It is, however, not an extensive market analysis.
Furthermore, the fundamental aspects of software sustainability and sustainment are described, based on literature and previous reports published by the Research Data Alliance and Software Sustainability Institute. In that context, Business Models are discussed, with a detailed analysis of different Revenue Models.
Based on the above background analysis, the status of materials modelling software is presented with respect to different sustainment attributes (Users and Communities, Product Management, Software development and maintenance, Revenue Generation). The findings are based on a workshop and surveys carried out by the EMMC during 2018. Finally, the thoughts and recommendations shared by Software Owners (SWOs) during the evidence gathering are summarised.
The main findings of the White Paper are:
- A variety of business models are used by SWOs, mostly based on a hybrid software and services approach. The revenue percentage share of services varies greatly; it is typically higher in the initial development phase of a software to enable industrial take-up.
- Software sales as well as subscription licenses in combination with a range of services (from initial implementation to contract research) are the predominant revenue mix.
- Services play a significant role, with income ranging from 20-80% in many cases. Target software to services ratio is in the range of 70-80 / 30-20. Services are not as scalable but a substantial amount seems required due to the complexity of the software and science. However, there are also exceptions, with some SWO running a successful business with a pure software (and some training etc.) focus.
- SaaS is still in its infancy. Ways of overcoming industry reservations with SaaS (e.g. security concerns) should be found since SaaS can greatly reduce software maintenance costs and provide a faster route for new features to get to users. Also, SaaS would help to reach small and medium enterprises.
- There is some skepticism but also opportunity for Marketplaces. The added value of the marketplace needs to be demonstrated to SWOs as well, in particular regarding the relation to customers. A concern is that the relation could become more distant rather than closer.
- New businesses developing services or SaaS based on proprietary software is somewhat hindered by the lack of business and licensing models between SWO and SaaS provider as SWO tend to focus on licensing to end users directly.
- Sustainability of software requires a change in education and better recognition of the persons in charge.
- Lifecycle of software requires substantial rethinking and a vision for the future as software’s age reaches decades.
- Working with customers (via services and consortia etc.) is important to uncover why they are using your software and what it takes to retain them as well as to fund new developments.
- Government funded projects are also important to most SWOs for development.
- Most software represented is proprietary but there are a range of involvements with open-source. There is a lot of complementarity (e.g. pre- post- processing and materials relations for open source codes) and SWOs can profit from the collaborative opportunities it brings.
- It is important to engage with the academic community, find ways to make software engineering more exciting and bring in new standards to make software sustainable and maintainable.