Software Licensing: Subscription vs Buy Once Software Pricing Models
Software licensing and pricing structures can be confusing, especially if you’ve never purchased corporate licenses or a subscription before. Twenty years ago, perpetual licenses were the only way to buy software. You bought your license up front, and you had the right to use it indefinitely. You may have paid for implementation services and a support contract, but you never had to pay any more to use the software.
As we entered the end of the 2000s, some corporate software began to be offered through the subscription licensing model. Adobe’s Creative Suite as well as Autodesk have moved to this subscription pricing model.
It’s the difference between leasing and buying a car. You still need to pay to service the car/software, but with the subscription model, you get new software versions as they’re released. With a perpetual license, you’re usually stuck on the version you purchased, though the company may offer an upgrade with a fee.
In today’s world with the shift toward Software as a Service (SaaS) solutions and the prevalence of cloud computing, subscription licenses are the norm within CAD software, design software and beyond. There are few perpetual license options still available, especially for corporate software solutions. However, if you do have a choice, which model is right for your company?
Why Choose Subscription Software Licensing?
There are many benefits to a subscription model, and for many solutions, you can only choose a subscription-based option. Advantages include:
— You’ll always have the latest version of software available. Upgrades are included in the monthly or annual cost. If you need to have the latest version of your software, this is a huge benefit to subscription licensing. • Flexibility — You can add or move licenses monthly, expanding your business as needed. If you only need the software for a short time, this can also be a great way to cut down on costs. • Reduce Capital Expenditures — There’s no expensive up-front cost with a subscription software license. You simply pay on a monthly or annual basis, instead of paying hundreds or thousands of dollars for an expensive perpetual license.• Your software stays current
With all these benefits why would you choose a perpetual license?
Why Buy a Perpetual Software License?
There’s a reason perpetual software models have become less common. Software updates at a much quicker pace today than it did even a decade ago. That requires agility in both hardware and software. Keeping the same basic piece of software for a long life cycle isn’t feasible anymore.
Perpetual licenses can make sense if you intend on keeping a computer for a long time and you don’t foresee a need for updates. If you plan to be away from the Internet for long periods, some subscription-based software requires a connection for verification, so a perpetual license might be necessary. Finally, you can save money in the long run with a buy-once license. If you already own an expensive license, it might be worth keeping it until you need to switch over to subscription.
Neither model is inherently better than the other, but subscription software is undoubtedly taking over. Holdouts like Autodesk and Microsoft are even switching over to mostly subscription models. It won’t be too long before perpetual licenses are gone forever.