Software has come a long way in the last decade, with emerging technologies helping to improve business processes, productivity and more. One of the largest shifts has been around software licensing, with some solutions opting for a subscription model while others perpetual licensing.
Perpetual licenses mean a buyer purchases the solution as-is to run as long as they would like, while subscription licenses are pay-for-use but are typically improved upon over time. While perpetual licenses may seem to be the better value initially, there are some myths that you should consider before making a software purchase.
MYTH: “Buying perpetual licenses saves me money.”
REALITY:
Perhaps you’ve heard, “don’t step over a dollar to pick up a penny.” This colloquialism applies here, as initially, perpetual may be a better cost option but it does not remain that way. When you buy a perpetual license, you are purchasing a product as a snapshot in time. Your organization will have new needs in the future that cannot be met easily or efficiently with the software tools you have today. This tech debt means that at some point, your organization will be forced to make a switch, compelling a second software purchase to keep your organization from being left behind.
By choosing a subscription-based solution instead, you can squeeze more value out of a constantly-iterating solution and lengthen its software lifespan, giving you more value for your dollar than if you had purchased perpetual initially. 
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MYTH: “When I buy a perpetual license, I’m getting a comprehensive solution.”
REALITY:
Bad actors are always trying new strategies to steal data, and software solutions must stay proactive in addressing emerging threats. In a subscription-based model, your provider is incentivized to invest in stronger security measures as well as new capabilities to extend the lifespan of your solution (and to encourage you to renew). Additionally, as industries evolve, businesses need to meet and exceed their customers’ expectations to avoid losing business to a competitor.
When you buy perpetual, you’re buying risk. Your provider has already been paid for the solution. There is no incentive nor mandate to invest in new capabilities or more robust security measures as this becomes an “added cost” to the provider. You risk being perpetually behind on industry and security best practices for your solution unless vendor competition, a high-profile event or even a security breach forces your provider's hand.
MYTH: “Subscription licenses are just a way to get more money.”
REALITY:
Bad actors know to target software solutions with inactive roadmaps. In fact, a 2022 Verizon Data Breach Investigations Report found that 62% of system intrusions involved bad actors targeting vendors and partners – not the organization itself.
This further demonstrates how important it is to choose a solution with a vested interest in keeping you safe. With a subscription-based model, your provider has both the capital and incentive to keep your data secure (and to keep you as a satisfied customer.)
MYTH: “In the long term, it’s better for my organization to purchase software with a perpetual license.”
REALITY:
Software code lifespan can vary, but most code tends to last 3-5 years if not constantly updated. This is due to the complexity that is built into the solution over time, as well as a consequence of Moore’s Law, the observation that the number of transistors in an integrated circuit doubles every two years. The pace of software innovation causes solutions to become obsolete very quickly, so your “perpetual” license would last only a couple of years before your software is outdated and you’re forced to make a switch.
BOTTOM LINE:
Avoid falling into the value myth of perpetual licenses. You risk your organization's security, industry competitiveness and overall budget when you choose a perpetual license. Instead, consider subscription-based solutions with active roadmaps that demonstrate a commitment to their customers’ security and success.
NEXT STEPS:
Sources:
- Komodo Digital. (n.d.). Code Lifespan: Identifying Software On Its Last Legs. https://www.komododigital.co.uk/insights/code-lifespan-identifying-software-on-its-last-legs
- Black Kite. February 23, 2023. The Three Most Common Ways Bad Actors Target Your Digital Supply Chain. https://blackkite.com/blog/three-common-ways-bad-actors-target-digital-supply-chain/
- Salon. April 8, 2002. A unified theory of software evolution. https://www.salon.com/2002/04/08/lehman_2/