Software companies are offering more online services and changing the way they license their products. The days when you could buy a version of software and own the license are nearly obsolete. More and more companies are starting to offer subscriptions where users pay a monthly or yearly fee to use their software instead of one upfront price.
Pros and Cons of Monthly Subscriptions for Large and Small Companies
Monthly payments sound great — until you consider the cost that this represents for small businesses and freelancers. One of the biggest problems for designers is cash flow. They may have a project that will pay big bucks down the road, but have to wait until it comes through for the “flow”. The monthly fees could eat them up while they are waiting for that check to come in the mail. Something that could have been saved up for and purchased when times were good are no longer a possibility.
A positive aspect to monthly subscriptions is that any updates to the program are included in the subscription fee, and updates are pushed out more frequently. You no longer have to wait for the next version to get that annoying bug fixed.
Subscription-based software also has pitfalls for larger companies. It can become difficult to track which services you are actually using. Sure, it’s easy to track the ones you know you’ll be using on nearly every project, but what about the smaller subscriptions that may change from project to project? Consider WordPress plugins, text editors and subscription-based reporting services. It’s great to be able to easily drop one subscription and pick up another when you need, but may become a hassle if your team is required to continue dropping and picking up subscriptions as they work.
However monthly subscriptions do keep large corporations nimble and not weighed down by large software package purchases. Before monthly subscriptions, these businesses were required to purchase a large number of licenses each time they purchased software for employees, as well as each time that software needed to be updated. They can now pay the monthly subscription and have the software offer auto-updates on each computer.
Software packages also now offer training programs that are very intuitive, user-friendly and easily grasped, so your IT guy can sit back on this project and let other employees take the reigns. This cuts back on training time, which we can all appreciate.
Overall, there are good and bad things about the new ways software companies are charging users. One good thing is that some software companies offer lower rates for new users. Corporations both large and small can take advantage of these and should get to them early — you never know when these deals can disappear.