Perpetual license vs. subscription license

For a decade or so prior to this, Bizprac software had been sold on a perpetual basis. This meant that when an individual or a company purchased the version of the program at that point in time, it was theirs to use for as long as the supporting technology would allow it. This is been the most popular method to provide software packages until the last five years or so. For example, going back about ten years you would buy a disc and install your CRM software (ACT, Maximiser etc), but today most CRM packages are offered SaaS, Software as a Service. Now it seems that every new kid on the block, along with those old, weathered software providers, are switching to a subscription based software only. While it can be confusing to the end user regarding the reasons behind the change (and some see it as a negative as they will never “own” the program) here are some reasons why subscription licensing is a good thing for the software user.

Your software stays current. The most common feature of any subscription/maintenance program is automatic delivery of upgrades or new versions. For engineering and design software especially, these may be critical updates. If codes or design guides have changed, you’ll want to make sure that your software takes that into account. Or maybe the developer has improved their calculation methods and come up with more accurate results. Likewise with accounting and payroll systems, they need to stay up to date with the ATO and changes like Super Stream. Whatever the reason, you know you can’t afford to fall behind. And if you’re on subscription, you will always be up to date.

You can call on Support (if needed). The second most common software subscription benefit is technical support. Anyone who’s used any kind of complicated software knows that sometimes things don’t go to plan and that our good friend Google doesn’t always have the answer. If you have a subscription there’s generally some sort of support included to get you out of a sticky situation. The smaller outfits seem to work really hard to prove that they can support you just as well as the big guys, even if they don’t have as many people.

You can plan ahead. The best thing about subscription is that it lets you plan for the future. If you’re on subscription, you know how much you’re going to spend on your software (or each month or quarter, depending on how the company breaks it down). There will be no big surprises in your budget because your all-important software package just released a major upgrade. Generally everything you will need is tied up in your software subscription.

Tax Deductable. Because you are leasing your software, unlike an asset which you could only claim depreciation on, the entire subscription amount is 100% tax deductable.
Subscription licensing models for software can provide significant value for you. For many of our clients, their Bizprac software is the backbone of their building business, now that system will always be up to date.