By Ryan Emerick, Client Experience Manager, Kite Technology Group
Businesses and users today have more options than ever when selecting the right computer software for their needs. Fifteen years ago, perpetual software licenses were the only way to purchase the programs that you needed. With the dramatic increase in connected and cloud-based devices, subscription software licensing or Software as a Service (SaaS) has dramatically changed the computing landscape. Here are some ways that subscription-based programs differ from perpetual purchased ones and how making the change can benefit your business.
It may come as a surprise, but subscription versions of software can often have a lower upfront cost and a lower total cost than traditional licenses. Instead of spending more than $300 upfront to install a program, subscriptions are priced monthly and end up saving you a significant amount of cash flow due to their structure. Shifting from massive Capital Expense upgrades towards a lower monthly operating expense allows for increased flexibility and lower risk for your company. Also, suppose you no longer are using the program or want to upgrade to a different version. Subscription models allow for the easy cancellation of your access, which can provide significant savings and flexibility. Finally, this incentivizes companies to offer a great product to avoid having users cancel their subscription to the service. This means that they are willing to provide discounts or superior service compared to a one-time purchase program where you have already spent your hard-earned money.
Maintaining a local infrastructure to run applications or manage software versions and keys can be a massive headache for any organization. The decision to upgrade an email or file server compared with moving to a cloud subscription for the services involves a considerable upfront cost of thousands or hundreds of thousands of dollars. Not to mention the significant added complexity of running locally based systems. Vendors like Microsoft, Adobe, Dropbox, and countless others have designed their latest programs to be managed and hosted in the cloud as a part of their monthly fee. This enables subscription software to cost significantly less money and time to manage day to day since you are not responsible for the hardware running things. It also ensures workers can always get to the information they need without downtime, making companies more efficient in what they do day-to-day.
Securing company and customer data is more critical than ever in a technology-driven world. Subscription software allows vendors to quickly patch vulnerabilities as well as alert users of security concerns. With the threat landscape evolving every day, purchasing a perpetual version of a program means that it can easily become exploited or compromised during the period you plan on using the software. Older versions of Microsoft Windows and other common programs become "unsupported" as they age since they no longer receive security fixes. This leaves customers who have paid left behind when it comes to compliance and regulatory laws, not to mention the additional
spend and hassle of purchasing a secure current version of the program they may already own. What a hassle!
In addition to the patches along the way, subscription software is designed to automatically provide users with the latest innovations and features that developers create. Over several years of paying for a program service, there are often hundreds of improvements that come out: Faster performance, more customization options, improved integrations with other programs, updated visuals. These are just some of the benefits of paying monthly for the key line-of-business applications used heavily every day. Just like smartphone updates to the operating system or your installed applications improve how they operate, paying for the subscription version of a program keeps you working on the latest and greatest that the programmers have to offer- providing you with a better overall user experience and improved efficiency and productivity.
Finally, we get to vendor support for a product as it relates to computer programs. When you have a question about an application or need help with an issue like application bugs or incompatibility problems, one of the key options for resolving these issues is to contact the vendor directly. Unlike traditional single purchase software with a finite lifecycle, subscription services include product support so that you can contact the vendor directly for help. When you have a question, it will be much easier to reach the right vendor resource to assist. On the other hand, traditional software packages have restrictions, "End of Support" dates, and support contracts that are often sold as separate add-ons to the product suite, costing you extra cash up front. This results in limitations to how long you can use the program and a less than ideal help experience when you run into problems and call tech support- not a good situation when you're relying on this software to work efficiently every day.
As the software industry evolves, the antiquated single purchase licensing model holds less appeal than ever for today's organizations. How can a program bought 5+ years ago support security requirements, cloud demands of a decentralized workforce, and a continually changing technology landscape? The resounding answer is that it simply cannot. Software Subscription Services are here to stay, and there are more benefits than ever to making the switch today.