With software subscription licensing, you pay a fixed amount per month to make use of the software. This offers some important benefits compared to the traditional model of buying the software licenses.
1. No major investment required
The costs of software are always an issue for companies (and individuals). Depending on what type of software you need, there may be, in addition to the licenses, also costs for hardware, infrastructure, maintenance, training, support and implementation. And then there is the time and energy that you must put into the implementation yourself. It is not pleasant to make a large investment in advance, without directly benefiting from it. Even though in the long term the software will save you time and costs and make you more successful. You can reduce the initial investment considerably by choosing for subscription licensing.
2. More flexibility
You don't know what the world will look like in 10 years. Or in 5 years. Or maybe it is even unclear how your company is doing in 1 year. How will the economy develop? What new needs do your customers have? How does the technology evolve? To what extent will you succeed in realizing your company's ambitions? Just some questions that are difficult to answer. Or think about the impact of COVID-19. This uncertainty requires 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 every month. You do not have to write off the software licenses over an X number of years or sign a contract for a long period.
3. Predictable and stable costs
Traditionally, when plotting the costs of business software over several years, you see large peaks and troughs in your graph. High costs in the beginning, payments in advance every year for maintenance and support and every few years a costly upgrade. Subscription licensing makes costs predictable and stable. The subscription fee can include multiple components, such as licenses, maintenance, (technical) support, bug fixing, updates and upgrades. This way you know very well what to expect in terms of costs. And that makes it a lot easier to make decisions with respect to your business and your strategy.
"With subscription licensing you avoid the large investment, you know exactly what to expect in terms of costs, and you are flexible and scalable when the situation calls for it."
Actually it is very simple. Your software needs change over time. Think, for example, about:
- Other functional requirements and wishes
- New technological possibilities
- More or less users
Then you don't want to make a large investment in advance, without knowing what the future looks like, right? With subscription licensing you avoid the large investment, you know exactly what to expect in terms of costs, and you are flexible and scalable when the situation calls for it.
