High level overview:

While Perpetual Licenses may be used forever, they do have finite lifecycles. Generally speaking, within a few years, they will eventually reach obsolescence due to factors like changing hardware, operating system changes, utility software updates, etc. Things change, and as they do, the ability to continue to support older software eventually reaches a termination point.

Maintenance, of course, is one of the solutions to this problem. Staying current on annual maintenance plans covers the expenses necessary to support aging software products, and also significantly buys down or eliminates the costs of staying on current product versions.

Under the Subscription Licensing model, upgrades and new features are released in real time, and are all rolled into an annual price. This helps streamline the entire version management process and ensures there are no compatibility or obsolescence issues for the end-user customers.

Cost structure:

With Perpetual Licenses, you pay the full price of the software license up front and pay for Maintenance contracts on an annual basis. For larger software deployments, the upfront costs can sometimes be significant, meaning capital expenditure is often required.

In comparison, Subscription Licenses usually offer more affordability, with a predictable annual payment schedule, thus often shifting it into part of the standard operational expenditure category.

Which is right for you?

If you are trying to decide between subscription versus perpetual, there really is no right or wrong answer—only which model is right for your agency.

Some key considerations to help you make the right decision:

• Ownership — is it important to you that you ‘own’ your licenses?
• Funding — do you have available cash or grants to fund the software up front? Or, would it be easier and better to fund the software as part of your annual budget?
• New Releases — Is it important to avoid technology obsolescence, and thereby avoid the surprise costs associated with aging software?