Buy or rent – which Software Licensing model is right for you?

Managing the software license lifecycle can be difficult but your immediate hurdle is finding the right licensing model for your organisation in the first place.

What licensing models are available?

Perpetual: Requires the user to pay an upfront license fee for the on-going right to use the software.

Subscription: Allows you to lease software at a lower upfront cost by paying on a per user, per device or server fee, for either 1 or 3 years.

Consumption: Allows you to adjust your costs to reflect actual usage to avoid overpaying for services.

How do you decide which licensing model is right for your organisation?

Compatibility

Although perpetual licences may be used indefinitely, they have a short lifecycle and within few years eventually become obsolete if the maintenance is not purchased with the license or due to the organisations direction to migrating to the cloud. As a result you may need to upgrade periodically to ensure compatibility with other applications. If you continue to use a product which has reached end of life updates, patches and hotfixes will no longer provided. This may expose your organisation to risks, including harmful viruses, spyware and other malicious software which can steal or damage your data.

With a subscription model, upgrades and new features are released in real time and rolled into the annual anniversary cost, ensuring no compatibility or obsolescence issues.

With the consumption model, again upgrades and new features are released in real time and rolled into the daily cost, ensuring no compatibility or obsolescence issues.

Scalability

With perpetual licences, if you employ new staff members you need to buy additional licences outright – but if a staff member leaves, you are stuck with those additional licences. Also every time you buy an additional license it may be of a newer version than a previously purchased license meaning that different users will be working on different versions of a particular software.

The subscription model provides a degree of flexibility because you only pay for what you use, adding and scaling back licences in line with demand at each annual anniversary. Furthermore you would be able to update each user and device to the same version according to your business needs.

The consumption model would allow you to switch off any service at any time providing the maximum flexibility and on the long run potentially saving you the most money.

Cost

The perpetual model allows you to pay for software upfront and maintenance in addition, for a set period of time. This model has the highest initial cost and the maintenance cannot lapse otherwise you may lose out on updates.

A subscription model offers better affordability with a predictable payment schedule, enabling the organisation to budget in advance for the expenditure.

The consumption model also offers better affordability in comparison to perpetual licensing together with the added flexibility of being able to switch services on and off as and when desired.

Which is right for you?

We have a team of highly experienced licensing consultants on hand ready to discuss your requirements and offer options based on your business needs.