Why Subscription Software for local ”on-premise” usage

Every company needs software. Our options for obtaining and running software “on-premise” that is locally or in a datacenter used to very simple: Buy it. But today we have more options available to us. Many software developers are offering subscription plans for their products. FYNB, Visma, Adobe, and Microsoft all have pay-as-you-go plans.

Adobe has gone so far as to end perpetual licenses. A perpetual license means you own the right to use the software, perpetually. That’s great because it’s yours. You can use it whenever you want to and for as long as your hardware will allow it. But when your version of that software is no longer getting the job done, you have to purchase a new 12 months subscription and support license to get the latest version. That’s how it used to work, and we were okay with it.

A subscription based license plan for on-premise software can offer a different way to get the tools you need. At first it may seem like a bad idea to keep paying in order to continue using your software. For your company, that may be correct. But in this article, we offer six reasons why subscribing to software instead of buying it may be the best solution for your company’s IT needs.

1. Much Smaller Upfront Cost. Purchasing software has a large upfront cost. It could be a large investment of a company’s capital to get the software your employees need. Renting or subscribing to the software means removing that sizable upfront cost. You now have smaller, more manageable payments on a regular schedule.

2. Simple ROI Determination. One of the issues in purchasing a perpetual license is that the high cost and undetermined length of use makes it difficult to know what that investment is going to cost you. You know the price you paid for the software, but you don’t know how long you will use it until the next update. It could be one year, or it could be five. The longer you wait, the less it costs.

But the longer you wait to update, the more issues you have with outdated software. What if your licensing needs change? If you add employees, you have to purchase more licenses. If you lose employees, you now have an unused inventory of software. You can no longer pay for the software because the employee is no longer there. You can’t bill out their time because there is no time to bill. You can’t get your money back. You can’t resell the software, either.

3. Short-Term Commitment. Buying a perpetual license means you commit your money to that license forever. A rental plan means you commit only for the time you need to use the software. There is no risk in having software sitting there. When you are done with it, you stop paying for it.

4. Fills Temporary Software Needs. Have an intern? Have a project that has special software needs? Rent the software you need while you need it. When the project is over, so is the rental plan.

5. Versatile Installation Options. Traditionally with perpetual software, the license is tied to the machine, but with rental, it’s typically tied to the usage. In other words, perpetual licensing plans often allow you to install the software only on one machine, maybe two depending on the licensing agreements.

Rental plans increase the number of servers on which you can install the software. That allows IT to work at their own pace and in a flexible way. Perpetual licenses alone may not have that option.

6. Flexible-Use Cases. Because of the nature of rental plans, they are often more flexible in how you can use them. They also offer constant upgrades, so you will always be up to date. Typically, they also offer additional services such as cloud storage or customer support options.

*7. Adding a great additional point by Visma VP of Marketing. your vendor must work really hard to keep you happy since subscribed software is easier to switch out of.

In some cases, perpetual licensing is a better fit. Long-term needs are often better met through that type of licensing plan. Meanwhile, temporary needs, flexible installation needs, or a lack of funds for upfront purchasing might mean that a rental plan is a better fit for you.