On Wed, 29 Apr 2015 16:55:58 +0100, scott wrote:

>>> And if they were clever they would put something in the license of the
>>> $10/month version that prevented the huge companies using it, thus
>>> keeping the 10 people paying $1.2 million at the same time :-)
>>
>> I would be surprised if they did, actually - in the long run, the
>> monthly subscription would generally net them more than a perpetual
>> license would.
> 
> There's a lot of $10's in $1.2m :-)

Yes, but that's the beauty of subscription pricing - it builds because 
you have recurring revenue.

$120 per year per user.  Over the long haul, that can net you more than a 
perpetual license - and from a business standpoint, the revenue stream is 
more predictable, which makes the business more stable.

That also makes it more reliable to update the product being licensed in 
this way.  With a perpetual license, you have to support each version for 
a period of time regardless of whether or not the customer upgrades to 
the latest version, which increases your cost overheads.

With a subscription - particularly in a SaaS environment - you always 
have your customers on the latest version - so you only have to support 
the current version.  That changes the support overhead significantly (it 
does, however, add some complexity when it comes to providing backwards 
compatibility - how much depends on the development model).

Jim

-- 
"I learned long ago, never to wrestle with a pig. You get dirty, and 
besides, the pig likes it." - George Bernard Shaw

Post a reply to this message