Perpetual vs Subscription Licensing: Which is Right for You?
Many software companies in the AEC and steel industries today are moving to subscription-only licensing plans, following suit with mainstream consumer trends from entertainment to ecommerce.
Subscriptions make sense from a business perspective, essentially guaranteeing a steady stream of revenue on a monthly or yearly basis. But what about the users? Despite the many benefits and growing popularity of subscription plans, they’re not a match for everyone.
Fortunately, some companies in the AEC industry, including SDS2 and ALLPLAN, still offer perpetual licenses for customers. Here, we’ll help break down the pros and cons of each license type to help you decide which is right for you.
With a subscription license plan, you agree to pay for access to a software program or suite on a regular, recurring basis for a set period of time. You'll often have tiers or plans to choose from, with limited functionality available at lower rates. This provides you with added flexibility and helps ensure that you’re not paying for more than you need. Some software providers also offer different rates depending upon the length of your subscription, with lower rates (but higher initial payments) for longer time commitments.
PROS: Subscription plans offer you a much lower initial cost, making powerful construction software much more accessible for businesses that are just starting out or making a new purchase. Payments are predictable and easy to roll into your operational budget.
In addition, subscriptions are usually all-inclusive, meaning you won’t see other charges tacked on later for maintenance or services. Your subscription includes immediate access to the latest updates, ensuring that you're always equipped with the newest features and bug fixes. Sometimes additional perks may be included as well, such as access to support resources, tools and add-ons, and more.
CONS: While your startup costs are lower with a subscription plan, obscuring the initial “sticker shock” that can come with professional construction software, you may end up paying a lot more in the long run. And if you happen to run into tough times when a renewal payment is due...well, tough luck. Just like your electrical bill, if you can’t pay, the lights are getting turned off.
Perpetual licenses, in contrast to subscription, are paid off in one lump-sum. In essence, you’re buying to own your software, rather than paying to use it. Without paying any further costs, you can use the software as-is for as long as you want. Of course, with how quickly technology evolves, your software may quickly become out-of-date. That’s why, along with many perpetual license plans, ongoing maintenance fees may be required to receive updates and new features.
PROS: The initial cost may seem pretty hefty, but once you have made an investment in a perpetual license, you’re in the clear. Even if you have to pay maintenance fees (more on that in the CONS section) in order to update your software with new releases and updates, you could save a lot of money in the long run, and the savings will add up the longer you have your license.
With a standard SDS2 Detailing license, for example, it would take a little less than 5 years for your perpetual license investment and maintenance fees to make up for the cost of a subscription. After that, even with maintenance fees, you’ll see significant savings while still having full ownership of your software.
CONS: The obvious downside to perpetual licenses is that upfront, lump-sum payment. For some businesses, that’s a tough pill to swallow—if it's even feasible. There’s no denying that BIM software programs across the board are a big investment. (As they develop at a rapid pace and play an increasingly crucial role in business’ daily operations, they’re an investment that can yield big returns—but that’s another story.)
Plus, in order to receive updates and get access to the latest releases or other perks, you will likely have to pay some form of maintenance or support fees on a regular basis. However, unlike with a subscription plan, these fees are optional. If you are unable to pay or choose to forgoe the latest updates and services, you will still be able to use your software—just not the latest and greatest version of it.
Despite the growing popularity of subscription licensing for steel detailing software and other BIM solutions, many users still find value in perpetual licensing models. The choice comes down to how you want to manage software expenses for your business, how much of an investment you can afford to make upfront, and how quickly you need to see monetary returns on your investment.
There’s no question that a perpetual license will save you money in the long run, even if additional maintenance and service fees are required. It’s sort of like buying a new car. You can buy to own, avoiding the cost of interest and paying only for the cost of the vehicle—along with potential oil changes, part replacements, and tire rotations down the road
But there’s a reason subscription plans are becoming more and more popular. Even though it may cost you more in the long run, the initial cost is much more accessible, and the regular payments are easier to budget for.