When searching for software to support your growing business, software companies vary in how they ask you to pay for it. It boils down to two options: 1) Software as a service 2) Perpetual License.
This is a question that you might be asking yourself when it comes to your personal housing, but software? A software product can be rented or owned. Here is a simple definition of both.
1. “Software as a Service” (SaaS)–You can subscribe for a reoccurring fee (weekly, monthly, or annual subscriptions). In this case, you are essentially renting the software. Think Netflix, Apple Music, or your car insurance. Free access as long as you continue to pay.
2. “Perpetual Software License”-You can buy software outright. Think DVD, CD, or the car you finished paying on. In this case, you own the license, or licenses.
For your business, you will have to consider the purpose for the software you are considering to use. There is not always a right or wrong answer because there are too many variables for there to be a best and a worst way to invest in software. Ultimately, each company must decide for themselves.
However, the best thing to do is to become familiar with the Pros and Cons of each method of software acquisition. And then choose with full confidence that you’re doing what’s best for the success of your business. Here are a few things to consider:
PROs to SaaS:
- Initially, costs are lower (You won’t have to buy the license if you can’t afford it)
- Financial predictability (You will know exactly what the software will charge)
- Low Risk (if you didn’t like the software or no longer needed it, you can cancel)
- Cloud-based (this can be safer than keeping the software only on your devices)
- Upgrades (usually software companies will offer higher level options you might want)
CONs to SaaS:
- Long-term, costs are higher (If you keep the software forever, at some point you will have paid much more than the license would have costed. This is why software companies are thrilled to offer subscriptions)
- No more pay, no more play (if you cancel at some point, you could lose essential data you might’ve embedded within the software you’re canceling.)
- Cloud-based (this a pro that can also be a con because it makes you cloud-dependent, which is intertwined with many other factors to operate correctly such as internet subscriptions. Plus, if for some reason the software company’s system goes down, your software goes down with it)
- Inflexibility (often times, subscriptions are generalized packages that the software companies can more easily spread around thus there tends to be fewer customization options.)
PROs to Perpetual Licenses
- Long-term, costs are lower (once you buy, it’s yours! No more SaaS residuals.)
- Dual-based (cloud-based as well as locally based, which makes offline usage independent)
- Software support (software companies usually offer additional options for enhanced support)
- Flexibility (customization options tend to be higher than with general subscription options)
CONs to Perpetual Licenses
- Initially, the cost is higher (if your company is unsure if the software is a long-term solution, or if your company can’t afford to buy the license, buying the software outright might be the wrong choice.)
- Fully upgraded already (this goes along with the higher costs, but it’s important to know that you buy the whole license, which means you pay for the best version.)
A Third Option
The stronger software companies will provide their customers a third option: the ability to subscribe initially but then purchase the perpetual software license at any time in the future. Often, this hybrid choice is known as “converting” from SaaS to Perpetual Software License. This is the best of both worlds! We are pleased to cater to the customer’s needs and desires when it comes to how you want to experience our software. The most important factor for us that you feel comfortable and confident in what our software can do for you before you have to commit to higher costs.
If you’d like to know more, please contact us. We’d love to hear from you!