Tech Watch | InfoWorld Staff » Kicking and screaming

October 20, 2004 | Comments: (0)

Kicking and screaming

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It appears software vendors and their customers are at opposite ends of the spectrum when it comes to newfangled licensing techniques.

While vendors are quick to move to subscription-based pricing, enterprises still want perpetual, pay-once-and-it's-all-yours licensing, according to a study released this week by Macrovision, SoftSummit, the Software & Information Industry Association and the Centralized Electronic Licensing User Group.

At first glance, it's easy to see why this divide exists: Software publishers can enjoy a steady, assured revenue stream by selling subscriptions while users would just like to own.

Software vendors face a peculiar durability problem compared to most other product companies. It's not like software is a set of tires that wears out and you have to buy new ones - you can use a piece of software forever. DOS will still run on some systems if you want to use it.

The reality is, though, that users do upgrade both hardware and software to get the latest features and pay ongoing maintenance fees, anyway. The challenge, as I see it, continues to be for software companies to find genuine, useful new features to put in their applications and not just add a few new background colors to the screen and call that an upgrade.

Macrovision's Daniel Greenberg, vice president of worldwide marketing, argues that subscription-based pricing spreads out payments more evenly. Somehow, I get the feeling that resistance or not, enterprises will find themselves having to make the change to subscription-based pricing eventually.

Unless they want to keep using DOS or Windows 3.1.

Posted by Paul Krill on October 20, 2004 05:19 PM

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