Expert: 3 Things I Wish Everyone Knew About Subscription Licensing [Interview]

Many of us already use subscription online services (think Netflix and Spotify). But when it comes to professional software, many companies hesitate to sign on. They worry that, with pay-as-you-go licensing, you don’t actually own anything or that costs may be higher over time.

 But Amy Konary, Program Vice President of software licensing and research at IDC—says that often these companies are looking at the issue all wrong. 

In a short, hallway conversation at LiveWorx 2017, we asked her to tell us more. Specifically, we wanted to know, “What 3 things do you wish everyone knew about subscription licensing models?”  

Here’s what she said:

 

Konary hosted a session on Subscription Models as a Foundation for Customer Success at LiveWorx 2017.

Don’t Compare Licensing Models—They Are Fundamentally Different

It’s natural to want to weigh one model against another. But, try not to compare newer pay-as-you-go licensing models to a traditional purchase. Subscribing to a service is completely different than having a perpetual license.

Specifically, she says a subscription model changes how you adopt software, your access to innovation, and your relationship to your provider (more on that below).

“Folks like to try to make one-to-one comparisons between the traditional and new ways of buying software, and they’re fundamentally different," Konary says. She suggests at the pay-as-you-go model’s benefits in isolation.

Benefits Extend Beyond the Lower Upfront Costs

Most people who compare subscription to perpetual licensing immediately see two advantages. With subscription, you can access the technology at a lower price point.  Plus, you can generally count the purchase as an operational expense (subscription) versus capital expense (perpetual license).

But if their analysis stops there, they may be overlooking some other major benefits:

• Quicker access to new technology: Automatic access to new technology and enhancements as the provider develops them.
• Shared commitment to success: The provider continually works to keep your business. You’ll build a closer relationship over time. And, they’ll offer things like proactive support, eLearning, and services to ensure you succeed with the software.
• Flexibility: You can easily add/remove licenses or change capabilities to meet your business needs.

Subscription Models Aren’t New

Finally, Konary points out that people have been subscribing to receive goods and services for decades. That means many best practices are in place that subscribers can use. So, it’s not as risky as you might think at first.

In fact, she says that modern pay-as-you-go models can serve as a foundation for companies that want a more digital, modern, and agile environment. And, in the end these models can help the company be more successful.

The takeaway: the costs, benefits, and drawbacks of each licensing model may not be apparent at first. Make sure you know what you’re getting with your purchase, and whether it can help you take your company where you want to go next.

Introducing Creo Parametric Essentials

Konary’s “3” provide an excellent starting point for anyone researching a major software purchase or upgrade. Still, you’ll no doubt have many, many more questions before you make a commitment.

Fortunately, if you’re thinking about adding or upgrading 3D CAD software in the near future, we’ve got answers. Start by reading up on Creo Parametric Essentials Plus. It’s a new, unique subscription offering that includes our basic 3D CAD tools, plus many of our most popular add ons. Best of all, they’re all available for one low subscription price. To see what’s in Creo Parametric Essentials Plus, download the brochure here. 

Get Industry News Right in Your Inbox

Keep in touch with all things CAD. Subscribe to our eNewsletter and get more tips, news, insights and product reviews. Subscribe now!

 

 

---