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Which Licensing Software Model is Right for you?

Updated: May 4, 2023

Software licensing, pricing structures, and technical support plans can be rather difficult to understand and confusing for anyone.

This article will try to explain the different software license models available and which one is right for your organization.

At the core of software licensing models, there are two models available in the world today.

  1. Perpetual software license

  2. Subscription software license

What is the difference between Subscription and Perpetual software licenses?

The main difference between the two licensing models is that the subscription license is priced on a yearly basis and is renewable yearly. The perpetual license is priced for a one-time up-front payment and right to use indefinitely.

The difference is easy to understand when comparing with Car leasing and buying.

Subscription software License

There are many advantages to a subscription model.

  1. Less up-front cost yearly, which reduces capital expenditures

  2. Software stays current

  3. Inclusive of Customer service and support

  4. Inclusive of bug fixes and updates

  5. Inclusive of Major Upgrades

  6. Flexibility to add more licenses when needed

  7. No hidden costs

Perpetual software License

This one-time payment model makes sense if your system is not connected to the Internet and does not need future updates. The system connected to the Internet requires regular security updates to protect from cyber-attacks.

  1. Paid up-front one time

  2. Extra cost for Yearly maintenance contract to cover technical support, updates, bug fixes

  3. Extra cost for major upgrades

The perpetual software license may seem less expensive in the long run, but it may not be the case in reality. For maximum usability of the software, a technical support contract (SLA) is essential.

Yearly SLA cost should be included in the operational budget where the cost of SLA is approximately 10 to 25% globally.

Which license model is better? Subscription or Perpetual

If you are debating between two licensing models, there is no right or wrong answer to the debate. You need to understand the pros and cons of both models and choose what is right for your business.

However, the subscription license model is slowly taking over due to software as a Service (SaaS) solutions and the popularity of cloud computing.

RAMsys is one of the flagship Remote Alarm Management software products of Intertech Software Development (ISD) and has been built with the most modern Microservice Architecture, enabling RAMsys to provide a consistent user experience across a range of platforms, spanning the web, mobile & IoT etc.

ISD offers both flavours of Licensing model for RAMsys and is helping organizations to select the best suitable Licensing model for their business.

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