Subscription vs purchase pros and cons

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koweb Contributing Member • Posts: 524
Subscription vs purchase pros and cons

Hi all,

It seems this topic gets mixed into other threads, so I thought it might be good to start one dedicated to this. I know that subscriptions are controversial, and that many have strong opinions. So, let's get started!

First, I'm ok with people voicing opinions, but be prepared to back them with facts. For example, if you want to say a company is "greedy" because of their subscription rates, bring facts to show how their model is more expensive than their direct competition (or compare the costs to before they started their subscription model). Or, if you want to state your opinion using conditions such as "for me, and here's why" -that sounds fine as well. Fair enough?

Second, I will start with some of the pros and cons that I see about the 2 different models...

***PURCHASE   -Typically, this is a one time purchase to license a particular major version of software. Note that you purchase a "license" which is a right to use the software under specific terms spelled out by the vendor. Almost always, you do not "own" the software.

PROS - Typically, users can decide if they wish to pay to upgrade to a newer version, or keep using their old version without paying any further fees. Note, even under this model that is not a universal provision, and many vendors ask for maintenance fees (not as common anymore). Often, purchases of multiple software products require separate purchases. And, rarely do purchases include "cloud services".

CONS - Usually have a much higher up front cost. Instead of signing up to begin paying a smaller monthly fee, the initial purchase price can be expensive; perhaps several hundred dollars for major products. Usually, purchasers are only allowed to use the version they purchased, and any future versions will incur a new upgrade cost. Maintenance releases may not be included (but often are).

***SUBSCRIPTION   -Usually a vendor offers this as a way to attract new users with lower monthly costs rather than a large up front purchase. License usage continues as long as the subscription fees continue to be paid.

PROS - No large front cost, along with a lower risk as there are usually options for monthly payments; so users can cancel if they no longer wish to use the software. Maintenance releases are included, as well as new major releases. In fact, this is almost always an "all in one" recurring fee. Often, subscription models bundle multiple software products together (such as desktop and mobile versions), and almost always are now including "cloud services" as part of the package.

CONS - Costs over time may be higher than a one time purchase. Note this needs to be calculated for your use case, as there is no guarantee that a purchase may be cheaper (especially if one calculates the annual "upgrade" costs to compare apples to apples). Another con, the user does not have the option to stop paying while still continuing to use the software; typically when the subscription ends the usage rights end.

I've tried to articulate that while there are significant differences between the 2 models, there is far more that should be reviewed before making your decision. IOW, it is not always a black and white decision. (I understand this might apply more where the vendor offers the choice for the same software, such as C1 currently does)

Note; there is a separate list of pros and cons that could be created from the vendor side, but I've excluded that for now. Others may see that important, so feel free to comment...

What are your thoughts on the pros and cons of one time license fees versus subscriptions?

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