Perpetual vs Subscription? How long can you hold out?

So I understand the difference between a perpetual license, which last forever even though it may not be able to be updated if maintenance is stopped while subscription only functions as long as subscription is current.

I realize that both products functionally identical. We can use the ADSK model as an example. Not to pick on them but they are the first to really do it in CAD/CAM. The Inventor HSM perpetual and subscription software are the exact same piece of code just a different license scheme.

My question is how long do you think you can really hold out if the rest of the industry sees ADSK succeed with this begins to shift their licensing?

You can no longer purchase ADSK perpetual licenses. There are many things in place that can force a user to subscription.

You can no longer let your perpetual license lapse or you loose it. I know you can still use the software but eventually you will need a new computer, that computer will probably have a OS you old version does not support. Now way to pay a penalty to and get your perpetual license back. You will be forced to go subscription.

In my current situation I have HSMWorks Professional. Lets say I purchase a 5 axis and would like to upgrade mine to HSMWorks Premium, well you can't do that so you will need to move to subscription.

Solidworks is not calling it subscription but I don't see how the new policy is much different. If you let it lapse you are basically required to pay all back maintenance up to the value of a new seat of software.

Just curious what other think. I have a HSMWorks perpetual license that I would like to let expire. But now they have me thinking that I can never get it back and if it is the right thing to do. If I do let it expire that means I can no longer upgrade my SW since it would not be forward compatible.

This whole decision has me thinking that ADSK has really done their homework on this and am always finding new ways they can apply leverage.

The entire software industry (not just CAD/CAM) is pretty much desperate to get to some kind of ongoing revenue model. The reason being that most products are quite mature, and making an "upgrade" that enough people actually want is very difficult (for some products impossible.) Do not think this is a problem only for small or specialized vendors, the mighty Microsoft Corp has struggled with this in OS, while having relative success in office.

On the other hand, the vendors with the biggest installed base of the "best" product of perpetual licenses will have the hardest time forcing the issue. Happy with Solidworks 2014 or photoshop 6? Ready to face OS changes with hacks, or threats, or maybe just punting entirely? Tell them to shove off.

I suspect that some large customers (and maybe not so large) end up with different contracts - given the record keeping requirements of medical devices or aircraft, being told that XYZ software house went out of business, their licensing servers died, and now you cannot read the CAD files for the product, is not going to cut it. One presumes those contracts are interesting....

What should *YOU* do? Hard to say. What do your customers or regulators require?

As for "how long could you hold out" - my life arrangements are so peculiar that the answer wouldn't help you. (I could just leave the field entirely, for example...)

I was not really asking what I should do as that is a unique decision for everyone.

Another example would be Sage software that we use for accounting/record keeping. We are at version 2014 because the changed to a subscription only. Mine is perpetual and keeps working. I no longer get updates, the integrated email does not work on a new OS. The only version now is pure subscription. So I am now wondering what happens when this computer finally dies or out accountant/tax preparer calls and says he can no longer open the files from Sage that I send him. I am guessing at some point I am going to be sending Sage some more money.

I am wondering at times if it is almost just a matter of time. Can these companies that the hit in income the first couple of years until people pretty much have not choice and start coming back to them.

For me the decision at this point is to just drop all the maintenance I am currently on. I could get along with the first version of SW I started with, but have 2017 so i could work with customers native files.

I just wonder how long people will really be able to hold out if the all CAD/CAM starts to shift. My SW VAR called to see if I needed anything and IRRC SW is going to try a rental/subscription option as well. They are not doing away with perpetual but this may just be the start for them.

csharp said:

So
My question is how long do you think you can really hold out if the rest of the industry sees ADSK succeed with this begins to shift their licensing?

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Now that is a good question, but I don't see that many doing it as it would be their selling point that it keeps working even if maintenance\subscription lapse.
I think it will be like most like how PTC, Siemens and now Solidworks have in paying back maintenance\subscription to get current.

Solidworks is not calling it subscription but I don't see how the new policy is much different. If you let it lapse you are basically required to pay all back maintenance up to the value of a new seat of software.

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they just did what PTC has done forever, we were just spoiled, once the last of the original SW team left the Frenches got greedy, they tried to do the back subscription thing way back in 2007 but then hit it hard in 2015.

Just curious what other think. I have a HSMWorks perpetual license that I would like to let expire. But now they have me thinking that I can never get it back and if it is the right thing to do. If I do let it expire that means I can no longer upgrade my SW since it would not be forward compatible.

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ME, I will always keep SW updated, you can run as many versions as you want as long as the OS supports them, so if you let HSMWorks lapse, you have 2017 SW and HSMWorks, you'll be able to run HSMWorks for 3 years thru SW 2020. Also if you change CAM every one now opens SW native to the current releases some even do the handshaking so if SW models change it will update to the new saved model and regen the toolpath.

I am with you do not like Inventors UI, mouse is backasswards. I guess we wouldn't be so pissed off if we didn't really like the product so much

This whole decision has me thinking that ADSK has really done their homework on this and am always finding new ways they can apply leverage.

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of course the did.... but it's better for us, they say.... cause you always have the latest no backwards compatibility issues

for course these are JMO's, as you said it is up to the individual or company to decide what is best for them.

Len I think you have it backwards.

HSMWorks will run in older versions of SW for 3 years. It will not run in 3 years newer version.

I won't be able to install HSMWorks 2017 in SolidWorks 2020.

csharp said:

Len I think you have it backwards.

HSMWorks will run in older versions of SW for 3 years. It will not run in 3 years newer version.

I won't be able to install HSMWorks 2017 in SolidWorks 2020.

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I am running HSMWorks 2016 in SW 2017. but I loaded HSMWorks 2015, works in SW 2016 but not SW 2017, so only one SW release newer, my bad, just assumed it worked both ways, so it's 3 back and 1 forwards.

Ride out perpetual + maintenance as long as possible, but really only to amortize the cost of the perpetual license in the first place. Everyone loses their shit about subscription when IMO perpetual causes far more issues all around.

len_1962 said:

I am running HSMWorks 2016 in SW 2017. but I loaded HSMWorks 2015, works in SW 2016 but not SW 2017, so only one SW release newer, my bad, just assumed it worked both ways, so it's 3 back and 1 forwards.

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Aren't SW educational licenses a year behind? I thought your SW 2017 was really SW2016????

rlockwood said:

IMO perpetual causes far more issues all around.

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Why?
How is perpetual any different than subscription?

To the OP: I will be riding the perpetual train until the final stop, and then either get on another perpetual train if there is one, or sit and rot in the old car until
it's absolutely do or die to get in on the subscription model.

SeymourDumore said:

Why?
How is perpetual any different than subscription?

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Well... accounting wise the maintenance and subscription fees are one in the same. Both a annual cost of doing business. The perpetual just has an extra cost that needs to be appropriated.

deljr15 said:

Well... accounting wise the maintenance and subscription fees are one in the same. Both a annual cost of doing business. The perpetual just has an extra cost that needs to be appropriated.

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Yes, they are both annual costs, except for these:
a: one is a bit more than twice that of the other. If properly amortized internally for multiple years, there is no difference in cost.
b: One is a forward liability, while the other is an asset.

SeymourDumore said:

Yes, they are both annual costs, except for these:
a: one is a bit more than twice that of the other. If properly amortized internally for multiple years, there is no difference in cost.
b: One is a forward liability, while the other is an asset.

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If software were an asset, this specific topic wouldn't require discussion.

rlockwood said:

If software were an asset, this specific topic wouldn't require discussion.

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How is a perpetual license not an asset?

SeymourDumore said:

How is a perpetual license not an asset?

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Not sure I would call it an asset. It can't be sold and only has value to the person that purchased it. It really has zero value outside of that. ADSK already established this with the lawsuit long ago on "first sale doctrine".

Now I have not read the entire license agreement but I would assume that it could be transferred with the sale of a business.

Quote Originally Posted by rlockwood View Post
If software were an asset, this specific topic wouldn't require discussion.

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Not sure why we would not be discussing this. Being an asset of not does not really change perpetual vs subscription.

In either case you are only licensed to use the software, one license is for ever, one is for a predefined term.

Don't think software is the only ones doing this. GM and John Deere have talked about a similar situation.

GM Says That While You May Own Your Car, It Owns The Software In It, Thanks To Copyright | Techdirt

csharp said:

Not sure I would call it an asset. It can't be sold and only has value to the person that purchased it. It really has zero value outside of that.

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Actually, it's defined as an intangible asset.

Intangible Asset Definition - AccountingTools

Nonetheless, perpetual license most likely has a value to the organization after the expiration of any maintenance contract.
Subscription license is basically a contract, with zero value after it's expiration.

You're licensed the software forever, but reality dictates that you can't (and probably wouldn't want to) use it as such. Particularly true in the HSMWorks/Solidworks combination with Solidworks' backwards compatibility policy, but generally true everywhere.

A perpetual license grants you only the perception of perpetuity. Subscription becomes easier to stomach once you recognize the difference.. And that's before you get into any of the realities of budget, sw developer motivation, sw developer solvency, customer choice, etc.

All Of This Has Happened Before And Will Happen Again

csharp said:

Aren't SW educational licenses a year behind? I thought your SW 2017 was really SW2016????

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research version are current with commercial, we have some seats because students that are working in an internship sometime come in with commercial SW file that are from a future version . . . SW 2017 when we have SW 2016-2017 EDU.

A software license is an asset in that you can take the Section 179 accelerated depreciation allowance. If you're not buying it for ther first time that obviously changes to an annual expense for the maintenance subscription. Leaving aside the accounting factor, there's the old rent or buy question. Would you rather pay $5000 a month to own a building and lot or pay $5000 a month to rent it? The software companies are essentially trying to force you into a rent situation because, as somebody posted, their products are practically mature and their prospects for revenue growth are tapering off just like with any other mature product. It remains to be seen whether enough of their customers will drink that particular Kool-Aid. I personally think business owners are independent types and won't stand to be dictated to by a vendor. I know I won't. My Mastercam X6 "sunsets" in May, meaning I can't catch up my maintenance subscription, I'll have to buy a whole new seat. Evaluating MC 2017 I don't see any improvements other than the graphic interface has better icons; the functionality is the same. So, no practical advantage in upgrading. Same thing with SW 2014, it works with MC X6 and if I installed one of the later versions they keep sending me, MC X6 wouldn't be able to open those files. Same goes for upgrading Windows 7: I'd be risking that a later OS wouldn't support Adobe CS4 InDesign and Photoshop--which happen to be the last versions you could actually purchase. Yes, I know, you don't "own" the software, you own a license to use it--but as a practical matter if they're installed on a computer that's not connected to the internet, and you possess the discs, you pretty much own it. If all your applications software works well with your OS you have no real reason to upset that position by jumping on the upgrade merry-go-round (especially a subscription/lease/rental arrangement).

Now, if you're the software manufacturer you would see product maturity as a ticking time bomb, with layoffs in your future. I would consider it a major gamble to attempt to force people into what most of them would consider a disadvantageous transaction, but apparently Adobe thinks otherwise. All Mastercam is doing is forcing me to freeze my version. For the cost of maintenance catchup I can afford to bring an instructor up from Denver and pay his lodging several times over, and I only need hands-on help every few years. So with me they gambled and lost.

With the non updating mentality dont we kind of cut are own throats in the terms of future progress? Yes we had phones and cars 15yrs ago that still would call and get us around. If no money is put forward in development of software how can it advance? I bought solidworks and mastercam back 10 years ago and pay maintainance on both. I like customers continuing to spend money with me and i reinvest in shop to make it easier to make better products for them. Its the same for the software companies.
Oh and yes the new mastercam is a hell of alot better than X6 was/is. Can i make my parts of today on x6, sure. Is it easier and faster in x9 or 2017, you bet your ass it is.

nmachine said:

With the non updating mentality ...

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Who said anything about not wanting to update?
All that was said that it's our choice how to update, let it be via continuous maintenance or choose to skip
5 or 6 years and pay full for all anew, perhaps even different.
Subscription-only not only limits that choice, but in fact mandates it.

If you equate that to your customer base, do you have a choice to force them to place orders with you month after month?
Do you cut your price to one quarter of the quoted, but then require payments for the component you've made for each and every year it remains in service?