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Are Software Subscription Fees a Good Deal?

10-28-18

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If you haven't been paying attention over the last five years or so, commercial software vendors are transitioning from allowing you to buy their software (which is now known as "perpetual licensing") to renting by the year or month (known as "subscription"). Businesses are much more affected by the licensing model than consumers, because business software is so much more expensive than consumer software. This website is consumer-oriented, so in this article I'll be addressing consumers. For the moment, we still have a limited choice about how we pay for software, but with most software the perpetual license is no longer an option. Frankly, that depresses me. The reason is that I don't believe it is ever cheaper to rent software than it is to own it. I can't think of anything that is cheaper to rent than to own--cars, houses, land, money. Why would anyone expect software to be any different? The only reason you would rent those other things, other than that you can't afford to pay for them right now, would be that you will only need them for a short time. But could I be wrong about this where software licensing is concerned?

I've read the arguments in favor of renting software. And to be perfectly honest, that's 90% of what you see online in connection with this issue. It seems like whatever is most profitable for sellers is what everyone is in favor of. Few websites seem to be concerned with the interests of us consumers. That's why I decided to create this website, to point out to you when you're being taken advantage of. Here are the arguments that proponents of renting software give: better security against malware, included cloud services, faster access to new features, better scalability in organizations, lower IT service costs, ease of replacement if your computer dies, lower cost, forces the vendor to keep innovating, reduced up-front commitment. Sounds like a long list, doesn't it? Let's discuss the arguments that apply to consumers.


Better Security against Malware

What software are consumers buying that interacts with malware? All software can provide an opening for the injection of malware onto your computer. Mostly, components of the operating system are targeted, because those provide the best access for malware. However, there have been well-publicized vulnerabilities in various versions of Adobe Acrobat, Adobe Flash Player, Microsoft Office, Microsoft Outlook, and let's not forget all versions of java and every program that runs it, especially internet browsers. Since we no longer pay for operating systems, the malware argument doesn't apply to them. Whether MS Office 365 is more resistant to malware than the version you pay for once depends on how often Microsoft updates it to make it less susceptible. Frankly, I have no idea how much effort they put into this or what their internal update frequency is. But I will concede that in theory it could be true that they can patch vulnerabilities faster with a product that is being updated every month, assuming that is what happens. Whether it actually happens in practice, I can't say. What should ideally happen is that as soon as a vendor identifies a vulnerability, a software patch is made available to all customers, regardless of how they have paid for the vulnerable software. My suspicion is that the reason this doesn't happen has more to do with free software and profit margins in general than rent-versus-buy software. Free software developers just don't have the financial incentive to fix their vulnerabilities the way paid-software vendors do. And even paid-software vendors have to be very conscious of their profit margins.


Included Cloud Services

I laugh at this one, because it's just so ridiculous. The fact is that software vendors and service providers are begging you to use their cloud services. They're constantly bombarding you with advertising to try to coerce you into paying for it, because it is immensely profitable for them. This has nothing whatsoever to do with what type of software licensing you prefer!


Faster Access to New Features

This one may be true. But what I think is even better is fewer new features. Let's face it, most software is only updated with new features to sell the latest version of the software. Who would pay for a new version of a software package if it didn't have new features? But along with new features come other less palatable changes. Microsoft is notorious for changing their software menus, interfaces, and file formats seemingly at random with each new version of their software. I was so fed up with Microsoft Excel and it's endless parade of needless changes that I decided back in the '90's to just stop using it! And I got endless flack at work over that from the people that continued to suffer with it. But I found workarounds and managed to avoid using it completely for something like 20 years! So, as far as I'm concerned, the most persuasive argument for renting software is not faster access to new features but fewer new features!


Lower IT Service Costs

To you and me that means software that is easier to install and use. If by that the rental software proponents mean software that updates itself as updates come along, then I can see their point. However, much of the "perpetually licensed" software had free patches (e.g. all version of Microsoft Windows in this century). These days, there is no reason for those patches to not occur automatically over the internet. If the proponents are talking about what I said above about rental software offering fewer incentives for unnecessary changes, I will definitely grant them that. So, they may possibly have a semi-valid point with this one.


Easier to Replace if Your Computer Dies

Really? Everyone should know that a software license is a software license--meaning that it's valid on any computer or hard drive on which you install it. For that not to be the case is an oversight by the software vendor. My favorite example is Matlab. When an employee leaves the company or for some other reason no longer needs it, the employee or the IT guy goes to the Matlab website and releases the license. Then some other employee is free to use it. I've done that myself on at least three occasions. And there is no excuse for a vendor telling you that their software is only licensed to your particular dead hard drive and cannot be transfered. Are you hearing me Microsoft?


Lower Cost

As fewer and fewer software vendors still give you the option of buying their products, it has become harder to compare bought verses rented software costs. But let's look at the three examples that I was able to find.

In each of the above cases, it is clear that the vendor makes more money by renting their software to you than by selling it. And that's why they rent it to you. Period.


Forces the Vendor to keep Innovating

I've already sort of covered this. But let me make things clearer. When do you have more influence over a landlord, before or after you've signed a rental agreement? The same applies with software. If a software vendor only has to sell you software once, he's not as likely to keep upgrading it as he is if he has to sell it to you every two years. This has to do with the unfortunate characteristic of human beings to be short-sighted. They tend to look at the profit they're making now, not so much at the profit they'll be making ten years from now by keeping their customers happy. If they have a continual income from rentals, they tend to kick back and relax much more that if they make their living from their current sales. If you don't see this, then I'm afraid there is not much more I can say to convince you.


Reduced Up-Front Commitment

Most software that consumers buy has a free trial period. By the end of the free trial, you know if you want to buy it. For the rest, perhaps there is a valid argument here.


Hopefully, I my arguments against renting software have been persuasive. But whether or not I have managed to convince you probably doesn't matter, because it seems that in every case where vendors see that they can make more money by renting their software to you than by selling it, you will soon not have a choice.

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