SaaS vs Traditional Perpetual License

SaaS vs traditional perpetual license

What is Saas vs Perpetual License?

In this modern age of the internet and technology, most businesses rely on software for the effective and smooth functioning of their day-to-day operations.

Big corporations that have resources available can set up their own software development and write their own software to meet their specific needs. However, the majority of the businesses must rely on niche-specific software available in the marketplace.

The traditional way of acquiring software is to buy the perpetual usage license with the option to buy support and updates. With the advancement of the 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 the pros and cons of both models with the objective to help you to select the best software for your training institute. So, let us look at SaaS vs Perpetual License


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. Users 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 a couple of years. However, when the agreed term period for free updates is over, the user does not get free updates until the user upgrades the license by paying the 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 forever 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.

Setup Infrastructure

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.

Recurring Costs

Besides subscriptions for software tech support and updates, hardware maintenance and replacement expenses should also be factored in cost estimation when selecting between perpetual or SaaS licenses.

End of Life

Even though you may continue using your perpetual license software forever. 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 bug fixes 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 center or on site, your data stays within the organization. So, if cost is of lesser concern than the protection of your valuable data, then acquiring a perpetual license may be a better option.

SaaS (Software as a Service)

The main distinguishing feature of this software business model is that software is delivered as a service via a web-based browser. Hence, the end user or customer does not require any specialized 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.

In all, SaaS takes cares the drawbacks of the traditional perpetual software. First of all, the customer does not have to come up with an upfront huge cost as the cost of acquiring and using the software is spread over a long period of time.  Secondly there is no special infrastructure or hardware required to run and use the software. Since it is web based and delivered via the web, any devices that can access the web, can use the software. This removes the cost of acquiring, deployment, maintenance and upgrade costs attached with hardware infrastructure. Thirdly, tech-support is usually include in the subscription cost so there is no separate cost for acquiring technical support if it is required. Fourthly, as long as the subscription is valid and active, all new features and updates are available at no extra cost.

Considering the benefits of the SaaS vs traditional perpetual license, it becomes the obvious choice for any business.


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