Subscription payments for download software


2

We will be licensing 2 downloadable software products, both aimed at animation / game development professionals / studios (1 plugin, 1 SDK / library) where subscription pricing is not currently common, though it offers many benefits.

Does anyone have experience with subscription based pricing for B2B download software, (rather than server based SaaS), What worked and what did not?

Pricing Software Subscriptions

asked Jan 6 '10 at 02:10
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Ian Wilson
88 points
Top agency to build award-winning mobile apps: Utility NYC
  • To clarify one very important point, by subscription I mean a web app type subscription model that is billing monthly (with all support and upgrades etc as part of the price). – Ian Wilson 9 years ago

2 Answers


1

Currently we are doing this. I believe support and minor, major all updates should be free if you go down to the subscription route, otherwise it's just ripping of users :)

We are currently offering 1 year subscription which includes free support and all minor, major updates. We added a simple auto-update feature as well to emphasize this. Also frequent updates will keep them happy, so just like SaaS.

Although I can't tell you what worked or not as we just started about a month ago to sell but so far no one really complained.

P.S.: What we do is a niche area and all our competitors are doing this as well. So it's kind of accepted way to do it in this business, like AV business. Where updates generally cost money after a point. So you might hit some extra resistance in your case.

answered Jan 6 '10 at 04:01
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The Dictator
2,305 points

1

We license engineering software under a subscription and perpetual based models but we use a licensing module that require a keycode (from us) that enables the software just for the term of the license. In our industry this is very common and has been done for 10 years now.

As fm said it is most common for subscriptions to include support and upgrades for the term of the license where these are sold separately for perpetual licenses.

In our case our pricing is dependent on the term of the license. The pricing model we use is:

  • 45% of the perpetual price for a 1 year license
  • 40% of the perpetual price/year for a 2 year license
  • 35% of the perpetual price/year for a 3 year license

Since we charge 15%/year for support and upgrades this gives you a break-even (assuming no interest) of about 4.5 years (4.5 X 0.35 vs 1.0 + 4.5 X 0.15) but the subscription model gives you more flexibility to add or remove licenses.

Originally we only sold 1 year licenses at 35% but we quickly found that that caused a lot of extra sales work every year. Having the customer committed for 3 years allowed us to invest more in training them up front to make them successful so we changed our pricing accordingly. This is common for software that requires a lot of training and deployment effort.

answered Jan 6 '10 at 14:24
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Dane
1,866 points

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Pricing Software Subscriptions