Pros & Cons of Perpetual Licensing vs Subscription

Pros & Cons of Perpetual Licensing vs Subscription

One big change that computer users have had to get used to over the last 10-15 years is the move by software providers from a perpetual licensing model to a subscription model.

At first, many companies and individual users resisted the thought that they would have to keep paying for their software every month when they were used to paying for it once and owning it.

But now that the subscription model has been in use for more than a decade,  companies have seen the benefits of having an always updated and supported application. Not to mention the flexibility of being able to access their software and data from any device and location.

90% of companies use cloud services.

Have you been trying to decide whether buying your software once and owning it (perpetual licensing) or purchasing a cloud-enabled app that is always updated (subscription) is best?

We’ll go through the pros and cons of subscription vs perpetual licensing below to help you weigh the differences.

Pros & Cons of Perpetual Licensing

Perpetual licensing is the model that came first. It came at the beginning of the computer age, well before cloud computing was ever around. 

In this model, companies purchase a copy of licensed software for each device that needs to have the software installed. Then, when a new version of the software comes out, they have to decide whether to keep the older version or purchase it again.

Pros of Perpetual Licensing

No Hidden or Ongoing Costs:

When you purchase the software outright and the number of licenses, it’s a “one and done” deal. You buy the software, and you own that licensed copy. You don’t have any other unexpected or ongoing costs related to the ability to use that purchased software.

Costs Less Over Time:

The upfront purchase is typically higher for perpetual licensing, but after roughly 4 years (it varies by software), you begin saving money over the cloud subscription model if you choose not to upgrade and just stay on the same version.

No Reliance on a Cloud Provider:

When you run software from your computer, you’re not relying on the cloud provider to serve up your application and data. So, you can work offline and don’t have to worry about cloud provider outages.

Cons of Perpetual Licensing

No Cloud Availability:

The biggest con is that when you install software on your hard drive and don’t purchase a cloud subscription service, you only have access to that data and application from that one specific computer. You could use remote access to get to the PC, but this is often slow and problematic.

Higher Up-Front Costs:

You have to outlay a large amount of money if you’re purchasing a licensed version of the software for several employee computers at one time, versus paying just a fraction of the cost to get started with a cloud subscription version of the same software.

Older Versions Can Cause Security Issues:

If you keep an older version of software running and don’t upgrade, you could end up losing support when the manufacturer retires that version. This could mean no more vital security patches leaving a security vulnerability in your network.

Pros & Cons of Cloud Subscriptions

The subscription model is the one that’s been taking over ever since the advent of cloud computing. Rather than purchasing your software outright, you end up “renting it” and paying monthly or annually to use an always updated version.

Pros of Subscription Model 

Pay Only for What You Use:

When you buy 20 copies of a software for your office devices and find out later that you no longer need two of them, you can’t scale down. You already own those copies. With a cloud subscription, you can scale users and software plans up or down as you need them, meaning you only pay for what you need.

Costs Less Up Front:

Cloud applications offer low costs to get started. Companies only need to pay for the user licenses they need and can often opt to pay monthly rather than annually. This allows many smaller companies the opportunity to use powerful software tools they otherwise couldn’t afford if they had to buy the software outright.

Cloud Availability & Maintenance:

If you’re running a perpetual license software on your on-premises server, you’re the one responsible to get it back up and running if it goes down. With a cloud solution, you not only can access your data and software from anywhere (it’s not device-dependent), but you also have a provider that has a fully-staffed data center of technicians ensuring the application environment stays up and running. 

Cons of Subscription Model

If You Stop Paying, You Lose the Ability to Use the Software:

You don’t own the rights to use the software forever when you’re on a subscription model. You have to continue paying the monthly or annual fee, otherwise, you lose the ability to use the software.

Need to Be Online for the Most Part:

While some platforms, like Microsoft 365, use a hybrid model that allows you to use their software offline, for most cloud subscriptions, you need to have an internet connection to use them.

You Are Reliant on the Cloud Provider:

You have a “middleman” between you and your software when purchasing a subscription. This can be good in the fact that you don’t have to maintain it yourself, but this means you’re also reliant on that provider. If there’s an outage, you’re left waiting for them to fix it without much that you can do.

Get Help Migrating to a Cost-Effective Cloud Environment

B-Comp Services can help your Denver area business make the move from an older perpetual license model to a cloud infrastructure that’s always updated and cost-efficient.

Contact us today to discuss your cloud possibilities. Call at 303-282-4934 or contact us online.