What is the difference between a perpetual license and a subscription license?

Change can be challenging, especially for those who thrive in routine. However, as technology continues to advance, it is vital to adapt instead of remaining stagnant. As with the question of software subscription vs. perpetual license, software companies are adapting to user needs while increasing their client base. By recognising that change can be useful in the long run, we evolve and better our lives.

Same goes for the developing software industry, where many companies are increasingly switching from perpetual licensing to cloud-based subscription. The latter allows consumers access to software previously unaffordable and businesses to avert their sights on more efficient development.

But if software subscription is better than traditional perpetual licensing—why? Let us take a look at the differences between the two and their benefits. Only with a clear understanding can you decide the best solution for your company. 

Software Subscription vs Perpetual Licensing 

The main difference is that with software subscription, users have temporary access to software over a fixed period. On the other hand, users can access a software perpetually over time with the eponymous perpetual license. 

Perpetual Licensing

In the early days of commercially sold software, products were sold for an upfront price. This is because the handling of subscription costs seemed impossible. Simultaneously, computer hardware was expensive and did not need regular upgrades, so it made sense to pay once and get software access forever. 

The downside includes a larger up-front payment, which hints at a long-term commitment in an ever-changing technological world. Considering the incremental data volumes, technological advances and growing online threats, this model simply does not offer the required flexibility. However, many products still use perpetual licensing as they prefer “owning” software instead of “renting” it through subscriptions.

Software Subscription

With software subscription, users are charged monthly or yearly for access to the software. This results in a significantly lower cost than the former model and broadens the software to more users. If a user decides to subscribe for an extended period, the company’s revenue would cost more than that of the perpetual license.

Companies have found the switch to software subscription very appealing in its many benefits. Take Adobe Cloud for example. They made the replacement, and in turn, brought in the recurring revenue they envisioned. Now, the software is more affordable to the public and eliminates the threat of cheaper alternatives. Unlike with perpetual licenses, they no longer had to consistently make considerable improvements to their software to entice customers.

Benefits of Software Subscription

• Lower upfront cost – Large one-time software purchases are a cash flow nightmare. It is a huge capital investment which takes a few years to depreciate. With a subscription model, you can opt for monthly, quarterly or yearly payment cycle. It is an expected expense; therefore, you can plan and budget easily. 
• Flexibility—With subscriptions, you can easily opt to scale up or down on the licenses, depending on business needs. Software subscription model allows you to have more control of your license scalability.  
• Stronger customer relationships—Subscription pricing builds stronger relationships through continuous updates and feedback from your customers. This allows you to respond directly to their needs instead of trying to anticipate them when working on a newer version of the software. Software subscription model helps shift the focus away from customer acquisition and more towards customer retention. 
• More willingness to try your product—These days, consumers are more attracted to subscription-based software. They are becoming less willing to splurge on an upfront payment that perpetual licensing requires. Since software subscription models are affordable, people are more likely to try it if the product catches their attention and curiosity. If your offering is what customers are looking for and they are happy, they may stick around for a long time, which also helps you to maximise your profits. 

Software subscription model is an increasingly popular business model. By subscribing to Aegis Cloud Disaster Recovery, you can reap quality products and services as well as other benefits at a low, very affordable cost. With a highly flexible Cloud Backup and Disaster Recovery architecture, you need not commit to a long-term contract and may pay only for your current needs. 

Benefits of Aegis Cloud Disaster Recovery

• Aegis 1Price-Any-Technologies (1PAT) — A Cloud Backup service that enables you to utilise any backup technologies at a fixed recurring price. With multiple technologies to fulfil your RTO and RPO needs, you can eliminate additional technology investments to cater to different needs. This solution guarantees successful backup and restore across the heterogeneous platform.
• Aegis DR-As-A-Service (DRaaS) – A Disaster Recovery service that is equipped with unlimited DR resources ready to be utilised during DR declaration. Aegis DRaaS helps you to save cost on Disaster Recovery Hardware and Software and guarantees successful DR drills. 
• Aegis Managed Service – A service that undertakes tasks such as operations, maintenance and support of your backup and DR operations. With more than a decade of experience in Cloud Disaster Recovery, Aegis Managed Service aims to ease your burden and to encourage IT department to be more productive and improve efficiency.

Find out more about the Cloud Disaster Recovery services offered by Aegis.

What is the difference between a license and a subscription?

Is a subscription licensing perpetual or non perpetual?

What is a subscription Licence?

What does a perpetual license mean?