The new subscription model allowed businesses to shift away from investing in software as a depreciable capital asset and instead rent software as an operating expense, improving their near-term tax benefits in many countries. Not soon after, confusion in terminology and meaning of the various ways to purchase and access software ensued. Read on for some tips on how to determine when subscription may or may not make sense for your business when evaluating workforce productivity tools like PDF software.
Businesses have long struggled with the decision of when, or if, to upgrade to new software. Product updates provide new end-user benefits with great capabilities that address productivity or usability challenges. These updates are also critical for IT, who want to ensure they’re deploying a solution with the latest security patches to harden their IT ecosystem. On the other hand, there are often expenses and downtime associated with implementing the new software, modifying business processes and training users. Therefore, businesses must carefully consider the “whole product”, which includes the tangible features and functions and also how they’ll pay to use it.
The promise of the “pay-as-you-go” software model is a great one and fits many organisational financial models and business use cases. Smaller monthly or annual outlays, more frequent application updates with the latest features, and in the case of hosted subscription software – no separate equipment to maintain for the application.
The idea of renting a utility only when you need it is effective when the math demonstrates that an outright purchase yields a lesser return for your particular situation. Here are some examples of consumer-focused “for hire” services that have found significant traction:
Of course software is an entirely different animal, but most people can easily understand an analogy related to home maintenance. As a “do-it-yourself” weekend warrior, you’re much better off renting a power washer for £20 per hour than purchasing it for £500. On the other hand, if you own a business cleaning pavement, the £500 appears more attractive and should pay for itself quickly.
Both options are relevant in the world of productivity software, and your decision will primarily depend on your level of use. When the software has become so ingrained in a worker’s daily tasks you may not want to pay for an ongoing usage model. In fact, when the demand and use are so high, renting can present a higher overall cost than buying. This along with other factors are critical to consider when purchasing business-grade PDF software.
Cloud = SaaS, right?
We mentioned earlier that there’s still a lot of confusion related to the terms SaaS, cloud and subscription. Be sure you understand whether the software subscription you’re purchasing is for an application hosted on a server in the cloud and accessed through a web browser; or, if it’s in fact a desktop application that’s installed on each user’s machine and only licensed on a recurring basis via a subscription license model.
I have seen it too often, where someone assumes that with their “cloud subscription” they are getting the benefit of a hosted application, with instant updates and accessible from any web browser, when in fact it’s only the licensing that’s controlled by a server in the cloud.
These days many enterprise subscriptions require a minimum commitment of at least 1 year or will offer a discount for pre-payment. Wait, what happened to no commitment and only paying based on usage? Even if you’re not on an enterprise contract, there’s also the chance that your subscription will automatically renew unless you explicitly opt-out. Always read contract terms thoroughly, as you may also encounter early termination penalties.
Alternatively, with a perpetual license and a maintenance & support agreement, you’ll buy the software outright and then pay a small, recurring fee for support and version upgrades for as long as you like. In this case, you know the cost and you can budget accordingly.
Be the gate keeper AND the key master.
Another trick to watch out for in either model is the ability for the individual worker to add or enable higher-end features which pushes your costs higher. Now the worker is controlling your costs because they like a new shiny button, not the line of business who has a well thought out, defined business case.
Top considerations when considering PDF software licensing