In this modern age of internet and technology, most of the businesses rely on software for effective and smooth functioning of their day to day operations.
Big corporations that have resources available can setup their own software development and write their own software to meet their specific needs. However, majority of the businesses must rely on niche specific software available in marketplace.
Traditional way of acquiring software is to buy the perpetual usage license with option to buy support and updates. With the advancement of world wide web and internet, however a new business model for software sales has emerged, it is called SaaS (Software as a Service) model.
In this article, we will discuss about pros and cons of both models with the objective to help you to select best software for your training institute.
So, let us look at perpetual licensing model first.
Perpetual License Model
This is also referred as on-premises software. Vendor sells the right to use a software version, added with some level of technical support and future updates. User can use the software perpetually while enjoying the additional benefits of technical support and free updates to the software for an agreed time frame that may last one year to couple of years. How ever when agreed term period for free updates is over, user does not get free updates until user upgrades the license by paying upgrade price. Same way extension for technical support can be added by paying more.
Pay Once, Use Forever
This is both true and wrong at the same time. You pay for license only once but how about tech support and software updates, security patches etc.. Now a days any software rarely works in isolation. In order to work smoothly and safely, You will need to keep up with operating system, security and other related software updates. Hardware does not last for ever either, What if you need to replace hardware and new hardware does not support old technologies that your software is running on? In general, both hardware and software (in terms of technology) have shelf life and eventually it will get over requiring you to upgrade or replace.
Perpetual license software needs to install on local machines, intranet, or your servers hosted in data centre etc. that involves huge infrastructure costs. You also need redundancy for business continuity and that can add to infrastructure costs of using perpetual license software.
Besides subscription for software tech support and updates, hardware maintenance and replacement expenses should also be factored in cost estimation when selecting between perpetual or SaaS license.
End of Life
Even though you may continue using your perpetual license software for ever. However, vendors usually do not provide infinite support and updates. The term “End of Life” means that there will come a time when a vendor will stop any development or bugfixes and support for the software version. For example, you may still be using Windows95, 98, Windows XP or Windows 7, but Microsoft is not supporting those operating systems anymore. That software has reached its End of Life.
Since perpetual license software is installed on your local machines or on your own servers at data centre or on site, your data stays within the organisation. So, if cost is of lesser concern than the protection of your valuable data, then acquiring perpetual license may be a better option.
SaaS (Software as a Service)
Main distinguishing feature of this software business model is that software is delivered as a service via web-based browser. Hence, the end user or customer does not require any specialised hardware to access and use the software. Secondly there is no upfront huge cost involved as software is distributed via subscription. A customer can use the software as long as it is needed. Additional features such as technical support and software feature updates all are included in subscription fees.