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Doug Nebeker ("Doug")
Are there any common ratio?
How it sounds if I offer
$X for a perpetual license
and another 0.2X for annual support and software updates (every year)
$0.45X for annually subscription license (every year)
I consider to offer them both.
There are pros and cons for each. Some customers prefer subscription license, while others prefer a perpetual license.
My software is B2B. Most of the customers are enterprise shops.
The license price + 20% annual support model is normally associated with traditional installed products, whereas the subscription model is popular for cloud based products.
We are busy transitioning our business to a cloud based model. In our particular case, it is more profitable selling on a subscription based model. This is assuming that your product has sticky properties and your customers will continue to use it.
Our monthly pricing for the cloud is around 10% the total cost of on premise. Our service requires alot of resources, so perhaps, yours can be 5% or even 1%.
I'd be interest to hearing other people views on this..
Adobe went with the subscription model, as did Autodesk - see http://store.autodesk.com.au/store?Action=html&Env=BASE&Locale=en_AU&SiteID=adsk&pbPage=Listing
I am going with the subscription model too, same price as AutoCAD since my app www.tvCAD.tv - is a companion for AutoCAD
Price-wise, AutoCAD went from a $7.2k buy + $750/yr to $2,370 /yr or $295 /month subscription.
All of my prospects (B2B) have been quite vocal about wanting on-going support.
Thursday, February 04, 2016
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