Software dilemma: pricing vs delivery

I’ve been talking to a lot of people lately about the various models in play for selling/buying software. There’s a lot of attention on this since major vendors started playing with the choices they offer their customers, starting with Adobe. Earlier this year, Adobe announced that its products will be available only by subscription and created a firestorm in its base. Turns out, many people like the perpetual/maintenance model! In our world, Siemens PLM started selling Solid Edge via subscriptions in an online store last month and Autodesk this week starts selling a huge part of its software portfolio by monthly, quarterly or annual rentals. It’s important to note that both Siemens PLM and Autodesk will continue to offer products on a perpetual basis, too.

At the same time, there’s a lot of noise about software coming from the cloud, via browser or light app on the desktop. Think Autodesk Fusion 360.

Far too often, we’re confusing the two. How we buy may or may not have anything to do with how we use.

Buying software is a business decision. Do we have the cash today to buy a perpetual license? Do we want to pay for maintenance? Are we so risk-averse that perpetual-can’t-be-turned-off-in-most-cases makes us more comfortable? Perpetual it is.

Is our business project-based or cyclical? Can we charge the cost of the software to our client? If so, it may make sense to buy a subscription.

Do we need reseller support? Is that included in the subscription or maintenance agreement? All things to consider. Does my vendor of choice even offer subscriptions? Whether they do or not has nothing to do with how well their software works. Managing potentially thousands of individual subscribers requires a significant back-office investment to manage licenses, users and products.

The likely reality is that engineering software buyers will probably stick to perpetual for most of their purchases, augmenting where it makes sense with subscriptions. Project work, crunch time, infrequently used software, worksharing between offices and similar cases could all lead to short-term subscriptions to boost capacity beyond the steady perpetual base.

Using software is a completely different animal from buying it. I can’t imagine (today) relying on CAD in a browser –Fusion 360 works well but not flawlessly– simply because our infrastructure isn’t robust enough. But it’s coming and when it’s here, I bet it’ll be sold in lots of creative ways.

Monthly subscription to a desktop solution? Check.  A perpetual license for a browser-based CAD tool? When we get to a tool robust enough to support that commitment, check.

Subscription does not mean CAD-in-the-cloud. Today, most subscriptions download the same solution to your desktop that you would get if you bought a perpetual license, perhaps in a shrink-wrapped box. It’s just delivered differently. Autodesk is not changing all of its products to run in the cloud because you can now buy a subscription. Solid Edge is exactly the same software, whether you buy it online from the store or on a disk from your reseller.

The distinction between how we buy (subscription, rental, perpetual/maintenance, etc.) and how we use (desktop, thin client, browser-based, client/server) seems clear to me, but if it’s not clear to you, please leave a comment below and let’s discuss.