Which is your preference?
A large up-front fee followed by smaller recurring annual charge or an all-inclusive, and typically "fixed", annual charge that spreads the cost of ownership of a piece of software evenly throughout the terms of use?
Personally, I never understood how software vendors ever managed to get away with the former, which is why I chose to offer the latter as the standard pricing model for all our off-the-shelf packages when I first started EBS in the UK back in 2001.
If anyone can be bothered to do the math they would find that an annual subscription charge of 50% of the standard perpetual license charge costs you no more over three years [50% + 50% + 50% = 150%] than the traditional perpetual license plus 25% per annum support and maintenance [100% + 25% + 25% = 150%] given that most vendors throw in the first year of support and maintenance free.
Over a 5 year term the subscription method does work out slightly more expensive at 250% of the perpetual license charge compared to 200% for the traditional purchase basis but the combination of the lower "year one cost of acquisition" and the ability to "walk away" from a failing solution long before it becomes a costly mistake that you can't reverse just seems like common sense to me.
Today, I spend much of my time encouraging each of my Vendor Partners to add a subscription option to their standard application pricing models if they don't already have one and, I have to say, virtually all our Vendor Partners are happy to either extend a subscription price as standard or to extend one if specifically requested.
So remember. Whenever selecting your next corporate application. Ask about the availability of an Annual Subcription Pricing Model.
If the vendor in question doesn't offer a subscription option then perhaps there's a reason why they want to take most of their money up front!!!
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