With subscription licensing of your software, you pay a fixed amount per month to use the software. It is an alternative to buying the software licenses. But why choose this form of subscription?
No major investment required
Many businesses (and individuals) balk at the cost of software. In addition to licenses, depending on what software you need, there may be costs for hardware, infrastructure, maintenance, training, support and implementation. And then there's the time and energy you have to put into implementation yourself. Making a large investment up front, without immediate value, is not pleasant. Even though the software is going to save you time and costs in the long run and make you more successful and decisive. You can reduce the initial investment by choosing subscription licensing. You won't then own the software, but you can use it just the same.
More flexibility
You don't know what the world will be like in 10 years. Or 5 years from now. Or maybe it's even unclear what your business will be like in 1 year. How will the economy evolve? What new needs will arise among your customers? How will technology develop? To what extent will you succeed in achieving your company's ambitions? Just a few questions that are difficult to answer. Or consider the impact of COVID-19. This uncertainty calls for flexibility. And with subscription licensing, you are flexible. You can adjust the number of users up or down each month and add or remove modules each month. You don't have to write off the software licenses over X number of years or enter into a contract for a long period of time.
"With subscription licensing, costs become predictable and stable."
Predictable and stable costs
Traditionally, when you plot the cost of enterprise software in a chart over several years, you see big peaks and valleys. High costs at the beginning, paying for maintenance and support every year in advance, and the occasional costly upgrade. With subscription licensing, costs become predictable and stable. The subscription fee can include several components, such as licenses, maintenance, (technical) support, bug fixing, updates and upgrades. So you know where you stand in terms of costs. And that makes it a lot easier to make other decisions and implement policy plans.
So is subscription licensing always the best choice?
No, it depends on your situation. It may well be that the above benefits are not important to you at all. Simply put, if you have sufficient financial resources, little need for flexibility and can cope well with peaks in costs, then buying licenses is probably more attractive. Because calculated over several years, chances are your total costs will then be lower. When you have a choice between the two models, it is wise to do the math and weigh the pros and cons plus risks.
