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Software Licensing: Perpetual and Subscription both Common

By Dick Weisinger

Subscription versus perpetual licensing. While perpetual licenses are still out there, subscription pricing models, and utility pay-per-use models have become increasingly common, especially for SaaS applications.

Flexera released today a comprehensive report on Software Monetization and Pricing. The report finds that the subscription model is already the most common licensing method used by software publishers, although perpetual licenses are still common. 74 percent of the vendors surveyed use subscription modeling for at least some of their products while 65 percent have at least one product with a perpetual model.

from: Flexera Monetization Monitor: Monetization Models and Pricing 2019

Vendors love the reliable stream of dollars a subscription model brings, but find that the model forces them to have to be more agile. A subscription model imply the need to be continuously updating features and functionality, as well as providing security updates.

The report found that “the momentum behind flexible models like subscriptions or usage-based models will continue to build. While subscription is taking the lead, software suppliers must take action
to get the systems and processes in place to understand and be able to implement multiple monetization models.”

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