Posey's Tips & Tricks

Are Perpetual Licenses Becoming a Thing of the Past?

Giving consumers options when it comes to licensing could help both sides.

Earlier this week, I got a phone call from a friend who wished to enlist my services. Since I fly drones and light aircraft, my friend wanted to see if there was a way for me to get some aerial photos of his property. For various reasons, it would have been much more practical to use a drone for the job rather than to try to take pictures out the window of an airplane. Even so, I knew that my drone wasn't natively capable of performing a precision site survey, but I had heard about some software that would allow me to do the job. After doing a bit of research, I discovered that the vendor charges about $500 per month to use the software. Needless to say, I did not take on this particular project because it would not make any sense to sign a long-term contract for software that I needed for a single job.

Unfortunately, this sort of situation is becoming much more common. It is becoming more and more difficult to purchase software based on a perpetual license. Vendors are increasingly licensing their wares on a monthly or annual basis.

From a vendor's standpoint, this type of licensing is probably a dream come true. After all, why get paid once for a license, when the license can generate a steady revenue stream instead? Over time, the monthly fees far exceed what it would have cost to simply purchase a license in the past.

I will be the first to admit that non-perpetual licenses are not all bad. There is some positive that comes out of their use. For starters, non-perpetual licenses generate cash flow for the vendor, and this helps the vendor to innovate and further improve the product. Every vendor has its own licensing terms, but in many cases, non-perpetual licenses entitle customers to free upgrades for as long as the license remains in effect. In spite of these benefits however, I'm personally not a fan of non-perpetual licenses.

Some of my views regarding non-perpetual licenses probably stem from my financial upbringing. I'm the type who tries hard to live within my means, and to avoid debt whenever possible. I of course realize that a non-perpetual software license isn't the same thing as debt, but it does have the same effect -- namely, tying up funds and decreasing monthly disposable income.

Not all of my reasons for preferring perpetual licenses are financial in nature. There is also the convenience factor to consider. On the surface, neither license type would appear to be more convenient to manage than the other. After all, organizations (and individuals) are required to license the software that they use. The license type does nothing to change that requirement. Over the long term, however, non-perpetual licenses can be more difficult to manage. Let me give you an example.

A few weeks ago, my bank sent me a new credit card because my old card was about to expire. When I activated the new card, the old card was immediately invalidated. Soon, I was being bombarded by notifications from various vendors stating that my card had been declined. I had to manually update the billing information for everything from Office 365 to Xbox Live Gold. It was a time consuming process, and each time that I thought I was done, I received a notification from someone else. I realize that the subscriptions that I have listed are cloud services, and not software licenses per se, but exactly the same thing would happen if I had software with non-perpetual licenses.

I realize that not everyone shares my views. I know some people who absolutely love the idea of non-perpetual licenses because treating a software license like a lease rather than a purchase decreases the license's up front cost. The monthly fee is usually substantially less expensive than what the software would ordinarily sell for. As such, non-perpetual licensing makes the software available to people who might not otherwise be able to afford it, because it is often easier to spend a comparatively small amount of money for a monthly subscription than to make a large, capital investment.

In my opinion, software companies could best serve their customers by giving them a choice on how to license software, rather than forcing customers into a non-perpetual license. That way, those with a tight budget could subscribe to a non-perpetual license, while those who prefer an outright purchase can choose a perpetual license.

About the Author

Brien Posey is a 16-time Microsoft MVP with decades of IT experience. As a freelance writer, Posey has written thousands of articles and contributed to several dozen books on a wide variety of IT topics. Prior to going freelance, Posey was a CIO for a national chain of hospitals and health care facilities. He has also served as a network administrator for some of the country's largest insurance companies and for the Department of Defense at Fort Knox. In addition to his continued work in IT, Posey has spent the last several years actively training as a commercial scientist-astronaut candidate in preparation to fly on a mission to study polar mesospheric clouds from space. You can follow his spaceflight training on his Web site.

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