More on licensing of these Safend products. No subscriptions.
Revenue recognized for licenses and maintenance over the term of the contract (this is different from what I thought in an earlier post):
"Safend enters into perpetual software license agreements through direct sales to customers and indirect sales through its OEM partners, distributors and resellers. Safend has defined two classes of end user customers, large and small, based on those with orders in excess of 5,000 licenses and those with orders less than 5,000 licenses, respectively. These license arrangements, generally also include a maintenance component. For arrangements with multiple-elements, including software licenses, maintenance and/or services, revenue is allocated and deferred in amounts equivalent to the VSOE of fair value for the undelivered elements and the difference between the total arrangement fee and the amount deferred for the undelivered elements is recognized as licensing revenue. VSOE of fair value is based upon the price for which the undelivered element is sold separately.
Safend has VSOE of fair value of maintenance for its small class of customers based on independent one-year maintenance renewals for its Protector product only. As a result, for the Protector small customer class with maintenance terms of one-year, Safend allocates the arrangement consideration to the elements in multi-element arrangements using the residual method. Under the residual method, the VSOE of the undelivered elements is deferred and the remaining portion of the arrangement fee for perpetual licenses is recognized as revenue upon delivery of the software, assuming all other revenue recognition criteria are met.
When VSOE of fair value for the undelivered elements does not exist, as is the case for Safend’s maintenance for its Encryptor, Inspector, Discoverer, Reporter, Auditor, large customer class Protector orders and small customer class Protector orders when maintenance terms are in excess of one-year, the entire arrangement fee is recognized ratably over the performance period as licensing and maintenance revenue."
