Subscription based licenses
by Doug Chick
Posted on Tue 20 January 2004 in software
A study released by the Macrovision Corporation says that more than 50 percent of software publishers favor subscription-based software licensing by 2006. Subscription-based software licensing is nothing more than a fancy term for leased software. The lease product business model has helped an ailing car industry so well that many software makers see it as a way to help them as well. With record low tech stock prices, record high inflation, unemployment, and gas prices, software publishers are not willing to take any chances when it comes to their customers moving to the competition—they want to lock you into the a contract and keep you there…forever if possible. That might be a sound business plan for them, but how can it possibly be good for you and your company?
Our Story Begins In the beginning of this century, immediately following the “Y2K” scare (buy new software or your company will crash) and somewhere in the thick of the tech stock collapse, (over valued companies with more investment money than actual product) an already upset, aggravated, and the bewildered computer profession (sick of software companies dictating their careers) began looking into other alternatives. (Linux and Open Source software)
Self-Fulfilling Prophesy Panic stricken with what computer people were trying to do, (take control of their lives) software companies began marketing to the corporate heads, software that promised less need for IT staff, and even became the principle leaders in outsourcing computer jobs to other countries. I suppose that their thinking is; they created the need for IT staff and they can take it away when it suits their needs, (“They” of course are the software makers) but its not that easy. Instead of calming computer people’s fears, software publishers made the situation worse, forcing computer people to find more inventive ways to keep their jobs at home. And the only way to keep the corporate sales rep out of your bosses office and your server room was to turn towards software that don’t have corporate sales reps; open source. IT quickly became a dog-eat-dog battle between software makers and information technology professionals. (And some not so professional, but that’s another story) With pushy overt aggressive salespeople and tricky licenses schemes, software companies have for the most part caused the problems that are crippling their companies.
What’s this have to do with subscription-based software licensing? I’ll get there. Right now I’m still venting…
A Birth by C-Section With the situation between computer professionals, (holder of the company purchase orders) and the software maker, (greedy money changers that are frequently known to recreate with livestock) software publishers decided that the only way they can survive is to do what the auto industry did that saved them, and give re-birth to software licenses by making people repurchase the same software every year. (Subscription-based software licenses) Even considering subscription-based software may suggest that the software market is saturated and there is not enough projected growth to maintain the same level of profit as in the past. It’s a lot like what light bulb makers are confronted with; if they sold a light bulb that lasts 20 years, than do they shut down and reopen their factories every 20-years? No, they have to be more inventive than that and create something like, subscription-based light bulbs.
Subscription-based software licenses doesn’t hurt the computer professional, it actually helps it. It is the corporate executives asking, “What about this open source technology?”. No software giants have to once again turn to the IT pro for help.