In the past, obtaining engineering software applications meant a purchase of a perpetual license, with annual maintenance, which is typically 20% of purchase cost per year. This is still the most popular approach.
However, Vendors are pushing more time-based licenses, called Subscriptions. Some even provide the ability to “remix” license counts quarterly, or semiannually.
An off-shoot of this is the “Debit Card” wherein the Company can use application software by the hour/day, and actual time/cost is deducted from the Debit Card. This proves to be very expensive and is losing interest.
Application “Tokens” is another approach whereby the Company buys a package of tokens, each application requiring x number of tokens to run. While those tokens are in use, they are out of the pool. Tokens are controlled with a time-based license.
Companies find the Subscription approach appealing even though it may cost more over a 5 year period than a perpetual license – why?
- Subscriptions use expense dollars, which is sometimes easier money to come by
- Provides flexibility so as needs change, the license mix can change, and
- Can be more easily charged to a project or program.
The downside of Subscriptions is license administration and expiring license keys. Time-based licenses, by definition, expire and when they expire, they shut down, even if in the middle of an important project. Therefore, keeping close track of license keys and expiration dates is becoming more critical.