Have you noticed that almost everything has become a subscription? From Netflix giving you a subscription to watch movies to being able to subscribe to a dog-walking service, there’s almost nothing you can’t pay for monthly.
The same goes for software. Software as a Service (SaaS) is a common term because everyone has focused their business on subscription-based software.
20 years ago, things were very different. People would purchase software once and use it as much as they wanted. They could pay for upgrades or updates, but only if they wanted to.
Why have things changed? Is a subscription really better? Let’s take a look.
Why the Move to Subscription-Based Software?
What caused such a significant change in how software is delivered? Often, it’s related to the cloud.
With cloud software, the seller has specific fixed costs to deal with month after month. They have to manage servers, bandwidth, and storage space. Instead of relying on your hardware, they host it themselves. So it makes sense to offer a recurring payment instead of a one-time purchase.
Not all software is delivered via the cloud, though. Subscriptions are also the norm because sellers enjoy predictable, recurring revenue. But that doesn’t make it best for you, the buyer.
At Dashboardfox we decided to do something different. We think people are tired of paying again and again or having to give up their software.
That’s why we offer perpetual software licenses.
Subscription-Based Software Pros and Cons
What are the pros and cons of a subscription? Here are a few.
Benefits of Subscription-Based BI Software
Many people are drawn to subscriptions initially because the cost is lower upfront. Or at least, they used to be. Today subscription prices have grown to be as much or more as an initial purchase used to cost just a few years ago. Of course, if you ask for a perpetual license, you’ll be quoted an even higher price.
However, a subscription can be great for a short-term project. If you need data, research, or reports for a short time, a subscription can be perfect. In fact, some folks find that an initial reduced first month or free trial is perfect for their needs.
It may also be important to have your software fall under operating expenses instead of being a one-time capital expense. That way you can record and write it off when it happens instead of depreciating it over time.
Finally, a subscription makes it easy to keep software up-to-date. Upgrades, new versions, and new features are included in many software subscriptions.
Drawbacks of Subscription-Based BI Software
For a lot of customers, subscriptions are not ideal. The cost is high, and it keeps rising over time. The provider lets you know about a price increase and there’s little you can do. You have to pay if you want to keep your software functioning.
It’s frustrating that your service can be interrupted, as well. A simple billing mistake can cost you access to the resources your business needs.
Or, you might accidentally pay for a subscription when you no longer need it. People underestimate their spending on subscriptions in a big way – they’re usually paying 4 times what they think they are. Don’t let that happen to you!
You’ll also end up with no asset at all if you stop paying. You simply move to another provider and pay them instead.
Finally, you’ll pay far more over time than a one-time purchase.
Pros and Cons of a Perpetual License
What about lifetime software? Here are some pros and cons.
Benefits of Perpetual Licensed BI Software
The biggest benefit of lifetime software is you pay once and can use it as long as you want. No need to change vendors, no need to keep paying. Over time, you save a significant amount of money.
If it’s better for you to have a capital expense that you depreciate over time, then a one-time purchase is ideal. It may be a tax advantage for you.
Also, you will have more leverage if you’re not locked into a subscription. Before you pay for an upgrade or additional service, the vendor has to earn your business. It’s in their best interest to continue to add features and provide great customer service.
Finally, the cost is predictable. You don’t have to keep paying or deal with changing prices. This can help with your budgeting.
Drawbacks of Perpetual Licensed BI Software
A perpetual license may be more expensive upfront, which can make it challenging to budget for.
You may not be able to get cloud delivery and the software may depend on your computer systems being robust and up-to-date.
If the provider adds features, you’ll have to pay to get the upgrade. Of course, you can simply keep using what you have as well.
Also, you’re making a long-term commitment to a single solution, which may make you nervous if you’re not sure about the provider.
Which BI Software License is Right For You?
Depending on your business, you might find that a subscription or perpetual license makes more sense for you.
For dashboards and reporting, we think a perpetual model makes sense and that DashboardFox is the best choice for your self-service business intelligence needs.
Interested in learning why? Contact us today to see how our model can benefit your company.