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Software Businesses The Almighty Buck

How Many Times Should We Pay For Our Software? 304

Posted by Zonk from the as-many-times-as-it-takes dept.
An anonymous reader writes "An editorial at ZDNet talks about the concept of subscription licensing for software." From the article: "But the software industry is greedy enough to want to go even further. Ignoring the subtleties of DRM -- which snares users by glossing over the unseen ties between content and format -- vendors from BEA to Microsoft are eager to take up the blunt cudgel of subscription licensing, which merely asserts that, if you don't pay up again at the end of the year, your software stops working. The best way to deploy the mechanism of subscription licensing, of course, is as a hosted service, because it gives the software vendor the ability to instantly turn off the software-on-tap if the renewal is not forthcoming. Perhaps this explains Microsoft's new-found attraction to 'hosted everything' (whether or not it can work)."
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How Many Times Should We Pay For Our Software? More

How Many Times Should We Pay For Our Software?

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  • Jaded article writer? Get a grip! (Score:5, Insightful)

    by zoloto ( 586738 ) * on Saturday October 29, 2005 @02:40PM (#13905699)

    There's just one problem. This perception of the software-as-services model is a jaundiced misrepresentation of the way that on-demand applications actually work. No on-demand customer pays simply for the privilege of accessing the software. They pay because the software delivers business results. And that simple distinction exposes once and for all the clay feet, the emperor's new clothes, of the traditional applications software industry. Their products don't actually work until they've been tweaked and customized by customers or partners, and therefore the licence of itself has no out-of-the-box value to the end user. Asking people to pay for the privilege of using the software isn't offering a service, it's taking a liberty. It's as much of a nonsense as asking a punter to pay a performance fee for whistling a copyrighted tune. If I'm paying a fee to watch a movie, listen to a song, or use an application, I expect to experience a professional, finished execution.

    True on-demand application vendors understand this. Conventional software vendors seem to think the world still owes them a living, just for bothering to write some software.

    This article sounds as if the guy was jaded from the start. His complaints are similar to those people who first scoffed at the notion of leasing a car instead of buying it. Some may consider it foolish, but some also see the benefits. In my experience you can lease a car for 12 months, have the "owner" of the car (or software) continually maintain it when it needs it.

    Don't read too deeply in on that analogy, please.

    But BOTHERING to write some software? By us Bothering to write some software you have some of the best software out there that's been used to secure most of the IT infrastructure the world runs on. Apache [apache.org], The Linux Kernel [kernel.org], The Various BSD's [bsd.org], SQL Databases [postgresql.org], Iptables [netfiler.org], SNORT IDS software [snort.org], OpenSSL [openssl.org], and many many more [google.com]!

    This guy is just trolling. The article is slanted because he believes that once written, any bugs, flaws (as in it doesn't do this the _way_ it should for ME) should all be done for free simply because he or general consumers are greedy. To a point, bug fixes should be fixed like glaring security flaws that could be used to take over your computer (ala windows in general, yes I'm biased) or damage your information etc.

    But get real. If you paid ONCE for your anti-virus software and expected it to work flawlessly and capture all viruses, worms etc without having to pay extra every year to maintain that reliability you're just out of your mind. There is no incentive to keep something up for free especially in an evolving industry. One that evolves and almost 2-5 times the normal rate of other industries.

    Think of it this way. You pay a subscription service similar to that of an anti-virus vendor. Receive continual updates, bug fixes, serious flaws get fixed for an annual price. This ensures the developers can work and continue to live as well. Why not? If you don't pay for the next years license, you simply don't get major version upgrades (maybe a serious bug fix or service pack) or new "features".

    I'm not keen on the idea of keeping your apps on a server/central location, unless it's on my home network and I have the option to install it centrally or on each workstation. It's just foolish to do it that way. But this guy's "it's mine, I want it all forever" after a simple purchase doesn't cut it. Want that new fender or tires? They're better quality than the current tires you have, then pay for them. Don't expect it for free buddy.

    This guy really pissed me off. And I have a football game to watch.

    • Re:Jaded article writer? Get a grip! (Score:5, Insightful)

      by rpozz ( 249652 ) on Saturday October 29, 2005 @02:46PM (#13905731)
      Receive continual updates, bug fixes, serious flaws get fixed for an annual price.

      For updates which provide new features not advertised when the product was released, fair enough: a subscription is reasonable. However 'bug fixes' and 'serious flaws' are faults with something you have paid for and should be fixed for free for a sensible time after release, just like any other product.
      • Very true, I believe I addressed that in my post previous.
        I agree with you on this.
      • Well, I think the question is what did you actually pay for?

        Software?
        Software + support?
        Software + support + updates?

        Or another way to ask the question might be: Should we require the software companies to include the price of technical support and updates within the price of the software or should we let the consumer be able to pick and choose the level of service?

        My concern is that if you start requiring software companies to include technical support and continous updates for free, the price of software

        • Re:Jaded article writer? Get a grip! (Score:4, Insightful)

          by aussie_a ( 778472 ) on Saturday October 29, 2005 @05:05PM (#13906310) Journal
          Well, I think the question is what did you actually pay for?

          If you buy a faulty (non-software) product, you can get a refund (the law protects you there). Yet when it comes to software, people are willing to accept that they buy faulty products, with it being the norm. I agree people can't create perfect software, but to have them charge for bug fixes is (IMO) ridiculous. If companies can't handle offering non-faulty software (or at least providing fixes for faulty software for free), then their current business model is broken.
          • That seems fair, but how do you define a fault? A product not being able to resist attack from malicious crooks using sophisticated tools? An application failing to do things it was not tested for? An application not preventing the user from doing something stupid (such as giving an unknown person critical private information just because he claims to be from his bank)? Does ANY industry provide that time of warranty? No, they don't. I certainly didn't try, but when my car got stolen even when it was locke

      • I agree completely (Score:5, Insightful)

        by Ritz_Just_Ritz ( 883997 ) on Saturday October 29, 2005 @05:05PM (#13906307)
        Perhaps I'm just old fashioned, but it used to be expected that if you paid for a software product that the vendor would maintain it and fix bugs for a reasonable amount of time (usually several years) as part of the original purchase price.

        That morphed into a "forced march" of periodic new version releases for features that many users didn't want or need and requiring additional fees.

        And NOW, they want to morph again into "you don't actually own anything, but we'll allow you to use the software you need to create and later use/access your business data for an annual fee."

        This is great news for OpenOffice and other open source applications that are poised to serve customers that balk at this new "pricing model."

        • Re:I agree completely (Score:3, Insightful)

          by Anonymous Coward
          I've got some news for you.

          A - you never EVER really owned anything. Teach you for being a sheep and simply clicking yes through the installer.

          B - The subscription model has existed for ever from microsoft. They have not released a new Os for years every release was simply new goodies+bugfixes+patches on top the old OS. Yes, this is true kids, Vista is NT in new clothes with some major bugs and useability fixed.

          C - Good software is not desired to be created outside the OSS realm. there is no financial
          • That was the attitude of the US car makers in the 50s and 60s. The Japanese wiped the floor with them. You can make a profit that way, just not the ridiculous monopoly billions that Microsoft have.

        • Re:I agree completely (Score:3, Insightful)

          by arminw ( 717974 )
          ......This is great news for OpenOffice and other open source applications.....

          It is also good news for Apple because they sell much of their hardware because they include very good software with it. Unlike MS and other software makers, they make their money on hardware and therefore do not have a big incentive to make subscription rental software. So if MS and others goes to a rental only model, anybody who'd rather own their software may go with Apple.

          If you buy a software CD box in a store, you OWN that

    • Re:Jaded article writer? Get a grip! (Score:2, Interesting)

      by Anonymous Coward
      Anti-virus, yes. I see how you should pay yearly for continual virus definitions and things like that. It's constantly being changed and upgraded, and that takes work. But on the other side of that, your anti-virus shouldn't just stop working alltogether if you don't pay for the nth year.

      Some screen capture, system diagnostics, file compression, etc., programs nag you every year, or even every month, as well even though absolutely nothing changes. Now, obviously there's almost always a free alternative, but
      • Anti-virus, yes. I see how you should pay yearly for continual virus definitions and things like that. It's constantly being changed and upgraded, and that takes work. But on the other side of that, your anti-virus shouldn't just stop working alltogether if you don't pay for the nth year.

        I use AntiVir (PersonalEdition Classic - http://www.free-av.com/ [free-av.com] and it doesn't cost me a thing.
        While it's not may not quite match the most expensive software, it beats paying a yearly fee.
      • The real issue is that software subscriptions really never have done well in the industry except in a couple of niche markets (web hosting, for example). Even with AV, you are just paying for access to updates, not for the renewed ability to use the software (granted it degrades in usefulness rapidly after you stop paying, but that isn't because they sabotage the software or anything).

        Microsoft has been at this for years. It was being seriously talked about as the future back in 1999. And the market has

    • Re:Jaded article writer? Get a grip! (Score:4, Interesting)

      by rossifer ( 581396 ) on Saturday October 29, 2005 @03:10PM (#13905849) Journal
      Exactly. Software subscriptions can provide more control to the customer, and I've considered them for my own software for exactly that reason.

      Simple thought experiment: I assert that my software will provide enormous value for a customer for six years, but my customer only believes that he'll get three years of utility from it. If I'm willing to offer a subscription where the customer pays 10% of the negotiated total price every six months, the customer will pay substantially less if their analysis is better than mine. And if their analysis is wrong, they are getting more utility than they thought they would, which makes the continuing subscription fee easier to justify on an ROI basis.

      The difficulty comes with how the price is set and explained. For personal use, the price will need to appear substantially below the best retail price (spread over at least 3-4 years) before it will stop feeling like I'm getting torn a new one. Would I pay $10/month for a personal subscription to MSOffice? Probabaly. $20/month? Probably not. MS site licenses pretty much are subscriptions already, so they've already got a lot of data on what companies can tolerate. Now they need to see if they can figure out what consumers will tolerate in the way of rental costs.

      Regards,
      Ross

    • Economies and Scale (Score:5, Insightful)

      by Stephen Samuel ( 106962 ) <samuel AT bcgreen DOT com> on Saturday October 29, 2005 @03:33PM (#13905936) Homepage Journal
      If you're paying me to specifically create/modify a piece of software for you, it makes sense that I need to charge you for updates and bug-fixes to that custom piece of software because somebody has to pay me for my time.

      If, on the other hand, I'm selling my 'custom' code for $500 each to 1,000 people a year, it's the ongoing sales that pay for the bug fixes and updates.

      Once I've fixed the bug for one of my customers it's almost free for me to distribute that fix to everybody on my customer list. It's dishonest of me to charge each of my customers the full cost of fixing each bug. On the other hand, charging them a small fee for ongoing admin and support is completely reasonable, as long as I'm actively supporting the code and you want the new fixes. If you don't want the fixes, then you've paid for my time, and there's no more need for you to pay me.

      The Microsoft approach, on the other hand, looks like little more than a greedy grab. I'm expecting that their yearly costs aren't going to be much less than the price of the (old) non-subscription version -- except that you're going to be expected to pay that price every year for the rest of your life -- whether or not Microsoft is supporing it.

      Worse yet -- If Microsoft wants to force you to move to Windows 2010, all they have to do is cut off the air supply for people using the XP/Vista versions and you'll have to either abandon your data or upgrade to 2010 -- so now you get dinged twice for the one piece of software.

      Subscription makes far more sense for something like anti-virus software because you actually need the most recent data for your code to work ongoingly. On the other hand, I can still do most of the content creation I really want with Word5.0 for MacOS7.

    • Is that you, Bill? (Score:3, Insightful)

      by Anonymous Coward
      Your assertion that "pay once, get bugfixes free" is not acceptable is flawed. I payed to have a working product. If they didn't do a good enough job to keep it working in the future, then they need to fix that FOR FREE. No need for bug fixes or anti-virus if there aren't any flaws in the first place. Subscription models aren't even a part of the picture until the vendor makes a bad product. That shows the real problem is the bad product, and that they need to fix it. Don't tell me to pay a subscription for
      • my point, and some have gotten the wrong impression was this: you pay the subscription, and you keep getting updates. Done correctly and you have a happy user base.

        for example Apple.
        You bought Panther & recieved bug fixes / updates
        You bought Jaguar & recieved bug fixes / updates
        You bought Tiger & recieved bug fixes / updates
        You'll buy Leopard & will recieve bug fixes / updates.

        I didn't mean to say you should pay for bug fixes, just the major updates (ala the Apple example).
    • But get real. If you paid ONCE for your anti-virus software and expected it to work flawlessly and capture all viruses, worms etc without having to pay extra every year to maintain that reliability you're just out of your mind. There is no incentive to keep something up for free especially in an evolving industry. One that evolves and almost 2-5 times the normal rate of other industries.

      That's the thing, though, see... if you buy antivirus software and it works exactly the way it's supposed to, if a year f

    • Re:Jaded article writer? Get a grip! (Score:5, Insightful)

      by ultranova ( 717540 ) on Saturday October 29, 2005 @04:44PM (#13906230)

      But BOTHERING to write some software? By us Bothering to write some software you have some of the best software out there that's been used to secure most of the IT infrastructure the world runs on. Apache, The Linux Kernel, The Various BSD's, SQL Databases, Iptables, SNORT IDS software, OpenSSL, and many many more!

      Perhaps you might explain what all of these Free Open Source projects, which can all be downloaded free of charge from the addresses you provided, have to do with substriction-based software ?

      This guy is just trolling.

      One of you is.

      The article is slanted because he believes that once written, any bugs, flaws (as in it doesn't do this the _way_ it should for ME) should all be done for free simply because he or general consumers are greedy.

      Or perhaps the bugs should be fixed for free because if you sell a defective product it is indeed your responsibility to either give the money back or fix the flaws ? After all, the product doesn't work as advertised, so you have either made a mistake or committed a fraud, and if you have made a mistake it is only reasonable to expect you to fix it.

      But of course the consumer is just greedy to demand that you uphold your part of the deal - deliver a product that works as advertized.

      But this guy's "it's mine, I want it all forever" after a simple purchase doesn't cut it.

      Then perhaps you might be so kind as to explain what is sufficient to give me permanent ownership of something I've purchased, since you seem to claim that simple purchase doesn't do so ?

  • Arrg Matey (Score:5, Funny)

    by 42Penguins ( 861511 ) on Saturday October 29, 2005 @02:42PM (#13905713)
    Let me answer for the pirates in the group: How many times should we pay for our software? "They'll never get any o me pieces o eight."
  • Though I'd vote for the CowboyNeal option.

  • Who really cares if this happens... (Score:3, Insightful)

    by WTBF ( 893340 ) on Saturday October 29, 2005 @02:47PM (#13905734)
    I run linux on half my machines and so that is obviously without subscription (although some distributions might try it) and the other half run windows. If Microsoft forces (for example) Vista into a subscription only model then I will stick with XP on the machines I have (I wasn't planning to upgrade anyway), and not buy any new licences. In other words I would move to linux if the need for a new machine was great enough, and stick to what I have at the moment. The average home users machine gets so bogged down with spyware that they replace their machines fairly often, or pay to have it repaired. This means that buying a new machine/paying money every year might be common practice for some people. Plus if it is moved to a hosted solution it might be harder to get spyware on them (but this is Microsoft...) and so a saving will be made with the reduction of costs due to paying people to remove spyware. The only problem might be work needing software that only runs on windows, but I am provided with remote desktop to my windows desktop anyway so I do not need windows at home to work.
    • > If Microsoft forces (for example) Vista into a subscription only model then I
      > will stick with XP on the machines I have (I wasn't planning to upgrade anyway),

      Don't plan on ever upgrading your hardware then. One of the biggest shams in this area is where hardware vendors do not supply drivers fo 'antiquated' version of windows (eg: XP by the time Vista rolls out). The gaming monopolies *cough*EA*cough* are also adopting this strategy by releasing titles 'only for' version xxxx - Eg: Running Tiga'W
      • It's a shame for sure, but I'm not surprised newer stuff won't work with ME. It's been many years since MS discounted the Win9x core (and thank god they did), and the newer versions of DirectX (which I'm guessing EA is basing their games on) aren't available for Win9X and ME. Really, everyone who's still using any Win9x product should either ditch it for Linux or update to Windows XP. It's such a horrible platform. :)
    • It's interesting, because this is exactly my situation too. My main work computer runs Windows XP 64-bit, while my other computers are either running Windows XP (all fully licensed) or Fedora. I'm using Synergy to switch between them with only one keyboard and mouse for all of them, and I find I use my Linux computers more and more as I get used to how they work. If not for a few progams that I really don't want to/can't live without (mainly Ultraedit (works pretty well under Wine though), Dreamweaver, Exce

  • Two comments (Score:2, Insightful)

    by linuxwrangler ( 582055 )
    1. If the fact that Sun has so-far signed up exactly zero customers for its grid computing product, this concept will be a hard sell.

    2. If anything will push customers to open-source, this is it.
    • If you have a small company of less then 20 people or so it may make sense to go with a hosted solution for email and some other functions.

      If you go and read about the features of .MAC you will see that this is the market they are aiming at. You have email, shared calenders, backups, shared file storage, syncing with handheld devices etc. .MAC costs 99 per employee per year. If you have 20 employees that's two grand per year. That's chump change compared with the cost of buying a server, maintaining a serve

      • Re:Two comments (Score:3, Insightful)

        by ultranova ( 717540 )

        If you go and read about the features of .MAC you will see that this is the market they are aiming at. You have email, shared calenders, backups, shared file storage, syncing with handheld devices etc. .MAC costs 99 per employee per year. If you have 20 employees that's two grand per year. That's chump change compared with the cost of buying a server, maintaining a server, and paying for all that software.

        If you only have 20 employees, couldn't you just use a wall calendar ?-)

        Anyway, I'd propably setu

        • Re:Two comments (Score:3, Informative)

          by killjoe ( 766577 )
          Presuming you got your PC for free (also presuming you are unable to sell it) it only makes sense if your annual maintenance costs are less then two thousand dollars. It's pretty easy to rack that up just with backups!.
  • isn't that what the open source business model is already doing? See Redhat subscription [redhat.com] , MySQL subscription [mysql.com] , SuSe Linux Enterprise 9 subscription [novell.com]

    If I don't buy one of these subscriptions, my software doesn't get bug fixes, security updates, which means it is unfit for further use. Essentially it means I have to stop using the software.

    • Re:Everyone wants to go in that direction. (Score:5, Insightful)

      by Hiro Antagonist ( 310179 ) on Saturday October 29, 2005 @03:00PM (#13905803) Journal
      Wow, now that's a strawman argument.

      Why do you have to stop using the software? Does it magically stop working or something? Just because you stop receiving bugfixes doesn't make the software unusable; it just means that, should a crucial bug be uncovered, that you will be vulnerable.

      I've got no problem paying for a subscription, such that I receive a guaranteed stream of updates and patches. Basically, I think of software as being like any other capital good that requires maintenance -- there's an upkeep cost, because no software is ever Bug-Free(tm)

      What I have a problem with are forced upgrades; if I'm happy with version X of a software, I should not be forced into upgrading to version Y for things like security fixes. If a software vendor is going to charge a subscription for maintenance, that's fine, but they are going to have to understand that, like any other capital good, maintenance means keeping the current software running -- not swapping it out every year.
      • But the question to be asked is: if you consider software a capital good, which therefore requires maintenance, what if it's not ordinary maintinence? What if it's a genuine fault? Should you be charged for a security fix if it was a fault in the original? If you buy a car and the locks on the door could be opened with a toothpick because the engineer screwed up, should you pay for it, or should the manufacturer eat the cost?

      • I think you've hit on the real issue here. In my mind, for example, I should be able to purchase Microsoft Office, since that is a piece of software that I can take a given snapshot of it, and it doesn't necessarily decrease in usefulness as time goes on. For example, there are people that are still running Office 97 and who wouldn't really benefit from the upgrade to 2003.

        On the other hand, you have software like antivirus software, where it's usefulness is predicated on constant updates. Why would a c

    • Re:Everyone wants to go in that direction. (Score:4, Insightful)

      by Stevyn ( 691306 ) on Saturday October 29, 2005 @03:04PM (#13905824)
      these are B2B services. Maybe it'll work, maybe it won't. But this is never going to work for home users. Nobody is going to pay a monthly fee. For one reason, everyone is used to either getting the program on their computer when they buy it, or borrowing someone's CD. People aren't used to the idea of going into a store and actually paying for software. They still see it as, "hey, can you set that up for me" when they really mean can you give them the CD and violate copyright laws.

      This also won't work because it gives absolutely no incentive for Microsoft to ever improve the products they sell to home users. They might cave for a corporate or government client who demands a feature or something fixed, but not for mom and pop.
      • "Nobody is going to pay a monthly fee."

        What are you talking about? People pay $12.95/mo just to get TV listings from Tivo. If I could pay $12.95/mo, say, for Office/XP, and not have to shell out $500 up front, many might consider it to be a good deal.

        "...gives absolutely no incentive for Microsoft to ever improve the products..."

        Have to disagree on this one too. People will pay for a subscription as long as they feel they're getting value from it. Let the value begin to disapear, and so will the subsc

        • people pay TiVo for a recurring service. The use of windows is not a recurring service. and nobody I know has ever paid $500 for for office/xp (whatever that is). Everyone either gets it from Dell at a discount or from the kid down the street. People put value on tv listings, not on word processors.

          And nobody feels they are getting value from windows updates. They are bug fixes to correct problems that they customer paid for, not new and great features.
    • If I don't buy one of these subscriptions, my software doesn't get bug fixes, security updates, which means it is unfit for further use.

      If you want free info on bugs subscribe to bugtraq [securityfocus.com]. I don't know about Redhat or SuSe, but if there's a security bug in mysql is will be reported on bugtraq with work arounds if any or recommendation to upgrade to more recent version. Since moving from Mandriva to Fedora, I don't have any subscriptions or 'club memberships', and don't feel as though I'm missing anythin

  • look at the sega channel.....interesting idea but it never really caught on. It did give users a chance to use a whole bunch of games that they may have not played otherwise, but I think the consensus was they would rather invest their time/money into a game they could play at their own pace.

  • Oblig. Einstein reference (Score:3, Insightful)

    by shobadobs ( 264600 ) on Saturday October 29, 2005 @02:57PM (#13905780)
    Honest software: It can be bought, but once it's bought, it stays bought.

    Paying over and over again for the same thing falls under the definition of insanity: doing the same thing over and over again and expecting different results.

    • "Paying over and over again for the same thing..."

      Ummmm... like paying to watch reruns on cable? Paying Blockbuster to rent a movie you already saw in the theater? Renting it yet again?

      Paying to go to the gym and run the same track and lift the same weights? Swim the same pool?

      Paying to keep the same lights on? House the same temp? Get the same water?

      Making the same car and insurance payment each month?

      Sorry, but I think even Einstein would agree his quote fails to apply here. People pay again and

  • Doesn't bother me (Score:5, Insightful)

    by SolusSD ( 680489 ) on Saturday October 29, 2005 @02:57PM (#13905781) Homepage
    I run Linux and use OSS almost exclusively at home, work and school. If greedy software companies want to push more people to Open Source it can only help. After all, companies only control the market if consumers allow it.

    • A site license should bother you. (Score:5, Informative)

      by twitter ( 104583 ) on Saturday October 29, 2005 @06:17PM (#13906611) Homepage Journal
      I run Linux and use OSS almost exclusively at home, work and school. If greedy software companies want to push more people to Open Source it can only help. After all, companies only control the market if consumers allow it.

      I run nothing but free software, but now me and everyone else at LSU gets to pay the Microsoft Tax [brlug.net] like everyone else. The $500,000 / year deal is so bad that the per copy distribution cost will be close to or exceed CompUSA customer rape prices. Far from pushing everyone into the Microsoft camp, it's being billed as "free software" and it will delay student use of real free software. With a site license, you too can subsidize other people's bad choices.

      Talk to your student government representatives NOW. here is no escape without knowledge.

  • History repeating (Score:4, Informative)

    by Anonymous Coward on Saturday October 29, 2005 @02:57PM (#13905786)
    IBM had a vision like this albeit not in a networked environment. They predicted that only a few computers are needed for anybody's needs and that they would provide them. Look where we are today. I'll stick with my linux and BSD OSes forEVER if need be. I'm not buying any of the DRM CRAP. I'll grow old with my Athlon XP and be happy. I don't need new office, new crap all the time. It's not a wearing off. It's still ticking as the first day I installed. It can still tick 100 years from now if all the hardware lasts that long. Software CANNOT be forced down our throats. MS is doomed if they try to pull this off. It might be ok on niche business 2 business markets but not as a consumer product. NO WAY, JOSE!

  • Not opposed . . . (Score:5, Interesting)

    by Seumas ( 6865 ) on Saturday October 29, 2005 @03:04PM (#13905820)
    I'm not deeply opposed to the concept of subscriptions. Disregarding operating systems for a second (I'm an OSX, Linux, Solaris guy), I think that people will have to wrap their mind around the new concept. We are used to paying for an item and owning it rather than paying for the function and service performed. If the price is reasonable . . . why the hell not?

    Forgetting that OpenOffice is free, let's say you had the option of paying $350 for each copy of each release of your office software (word processor and spreadsheet program) every couple of years or so. Why not pay $5/mo for the same functionality and never have to worry about upgrades or new releases? Same with games and everything else. Why should software be so different than any other delivered service?

    My main concerns would be:

    + What if the service stops being offered or the company goes out of business?

    + What are the security and privacy ramifications?

    + What are my options if I don't want to use a net connection?

    + What will happen to my documents/material when I stop subscribing to the software?

    + Will others have to subscribe to the software service to make use of the content/items I made?

    + Will I be forced into using an "application server" style arrangement or will I still be able to download and install the fully functional software on my actual computer? I don't want to be tethered to the internet for all functionality.

    + Will you charge me per-seat/user even in a household? Or can I still just have one subscription and let everyone who comes to my house or lives with me use my software as if it were not a subscription? I don't want to have to pay $20/mo for four people in my home to access something when I could just buy the software and they could use it for "free" without additional costs.

    + Am I going to have to allow a credit check and offer up my credit card number, social security number, home address, full name and other private data to secure an account with the software subscription service? Won't this make me easy to track in relation to anything I ever read, access, view or create/author? Do I really want this?

    • WHat I would worry about most is the hosting company combing through my data and either selling it, selling information about it, or targetting advertising based on it.

      Once a corporation has enough information about you and has all your emails, documents, spreadsheets etc they would pretty much have to sell that information to others. There is just too much money there to ignore. Needless to say they won't tell anybody about it either.

    • Re:Not opposed . . . (Score:2, Interesting)

      by madhippy ( 525384 )
      + What will happen to my documents/material when I stop subscribing to the software?

      perhaps the only way people will move over to this form of software licensing is with 'open' document formats ...
    • We are used to paying for an item and owning it rather than paying for the function and service performed.

      Given the degree with which people depend on the availability (and overuse) of consumer credit, they are quite acclimated to paying for stuff over long periods of time. I'm not sure the issue of "ownership" would really make that much difference, since Joe Average Computeruser isn't attached to the device the way that the tech crowd is. As long as they can surf, read e-mail, chat, and pirate music/soft

    • Re:Not opposed . . . (Score:3, Insightful)

      by cgenman ( 325138 )
      Let's say you had the option of paying $350 for each copy of each release of your office software (word processor and spreadsheet program) every couple of years or so. Why not pay $5/mo for the same functionality and never have to worry about upgrades or new releases?

      A: Because it won't be 5 dollars a month, that 350 dollar piece of software will be 350 dollars per year.

      B: Because I'd much rather not have to worry that the makers of all 10 pieces of key software on my machine have current credit card info.

      C

    • Re:Not opposed . . . (Score:3, Interesting)

      by Omnifarious ( 11933 ) *

      I think selling software on a subscription that causes the software to stop functioning if the company dies is unethical. In fact, I think selling any software on a subscription basis is unethical unless its Open Source. Even more so than selling software that isn't Open Source.

      This is because of the lock-in issues associated with proprietary software. The cost of ceasing the subscription or having the company that provides it goes out of business is enormous. This means that any provider of proprietar

  • There are some things that from an org standpoint, I can see benefiting from this type of licensing *depending on the terms and inclusions in the contract*.

    Things like Office or Windows I'd be pressed to call a good idea as those applications rarly (at my org) receive large maintenence on other then patch updates.

    Where as things like ERP systems with updated tax codes and compliance issues are often modified quarterly or yearly and are maintained by the issuing/support company. (again, in my experience).

    So

  • Microsoft's biggest competitors... (Score:5, Insightful)

    by Bogtha ( 906264 ) on Saturday October 29, 2005 @03:16PM (#13905864)

    ...are themselves. What are the benefits of the last few versions of Windows? What are the benefits of the last umpteen versions of Office? They don't seem to be able to offer anything compelling to upgrade for.

    If people have the option of staying with their current software, they will almost certainly do so. Subscriptions change this, because the vendor gets paid over and over regardless of whether any upgrades happen. Suddenly, they don't have to develop new features in order to get people to buy copies, they only need to develop new features in order to stop people switching away.

    Take a look at Hotmail or Yahoo Mail for example. Until GMail came on the scene, they seemed quite content to sit back and take money from advertisers and paid users without doing much in the way of development. Then GMail came out, and they were forced to begin developing new features in order to stop people from switching.

  • This isn't exactly a new concept. FlexLM, now a product of MacroVision, turns 95% of the EDA industry's software into a subscription. You can "buy" a software package, but pick and choose the features you want to pay for. Didn't buy feature X? You'll have 0 keys available for checkout, so don't even try to use it.

    I'm torn on the whole concept. I've been known to use old software because I don't need to upgrade as it works just fine for me. Pricing of the subscription would be key. An Office package from Mic

  • How Many? (Score:5, Insightful)

    by nacturation ( 646836 ) <nacturation&gmail,com> on Saturday October 29, 2005 @03:24PM (#13905895) Journal
    "How Many Times Should We Pay For Our Software?"

    Sheesh... what a lame article. Isn't this like asking, "How many times should we pay for electricity?" The company offering hosted applications isn't trying to swindle anyone. You go in with the full knowledge that if you keep using it, you keep paying for it. The company offering the service keeps incurring hosting costs and they keep upgrading the software as part of the deal. If that model doesn't appeal to you, then you shouldn't have chosen it in the first place.
     

  • on the bright side, (Score:5, Interesting)

    by Khashishi ( 775369 ) on Saturday October 29, 2005 @03:26PM (#13905901) Journal
    Subscription based licensing will encourage the release of products that don't suck.

    Because if the product sucks, nobody will renew the subscription.

    In the gaming realm, companies will be encouraged to continually add new content and improve things to keep the game from falling out of favor.
    • Subscription based licensing will encourage the release of products that don't suck.
      Because if the product sucks, nobody will renew the subscription.

      Or maybe, in cases like Symantec's Norton Utilities, trying to remove the software can make your system worse, so you reluctantly continue to pay to keep your computer from crashing, and pray that maybe, just maybe, the next update will fix the program's problems.

    • Re:on the bright side, (Score:3, Interesting)

      by Kjella ( 173770 )
      Subscription based licensing will encourage the release of products that don't suck.

      Because if the product sucks, nobody will renew the subscription.

      In the gaming realm, companies will be encouraged to continually add new content and improve things to keep the game from falling out of favor.

      It works very well in a market with good competition. Games have heavy competition and heavy substitutes, entertainment in general. Rental is a really lousy way to have a product you keep using day out and day in and doe

    • Re:on the bright side, (Score:3, Informative)

      by HardCase ( 14757 )
      Subscription based licensing will encourage the release of products that don't suck.

      Because if the product sucks, nobody will renew the subscription.

      The EDA software that I rely on to electrically simulate memory modules is sold on a subcription basis - and it's thousands of dollars a year for a single license! It has bugs. It has a poor user interface. I receive patches and upgrades at least once a month. I could switch to the competitor's product, but then I'd be forced to convert all of my libraries

  • Where's the breaking point? (Score:3, Insightful)

    by HangingChad ( 677530 ) on Saturday October 29, 2005 @03:32PM (#13905930) Homepage
    vendors from BEA to Microsoft are eager to take up the blunt cudgel of subscription licensing, which merely asserts that, if you don't pay up again at the end of the year, your software stops working.

    I can see where they could start thinking they could get away with it. MSFT users take a porking and keep coming back for more. They pay for an operating system, prove they own it to get it working, then pay for an anti-virus and anti-spyware subscription to keep it working right. In the business setting I'll watch customers pay for MSFT licenses, then find out they have to buy this or that CAL on top of it, depending how they're using it. It's insane, but they have their passive aggressive little snit fit and write the check.

    Somewhere this is going to hit a wall. Open source alternatives are getting better, big software companies are boning their customers at every opportunity. You have to think there's a tipping point where customers will say this far and no more. Some have already gotten there, more consider it all the time. OpenOffice, despite its flaws, is a very functional alternative.

    I'm wondering if it will keep happening little by little or if there will be a big bang type migration that will cause big software to start looking at their price points, probably way beyond the too late point? I have a hard time not believing that somewhere, not far away, this tendency to keep porking the customer is going to come back and bite them on the ass.

  • This will NEVER EVER work (Score:3, Interesting)

    by a_greer2005 ( 863926 ) on Saturday October 29, 2005 @03:33PM (#13905937)
    Heres why:

    1: Bandwidth, it takes a lot of network to pull a CD image accross a LAN if you are deploying, say a new version of Office on a network, divide the lan speed by ~200 and that is a good average measurment of "cloud" speed (the speed at which your network head end talks to that of Microsoft or whoever over the public internetwork) and I doubt that the prices of OC3s will fall anytime soon.
    2: Lack of access: It it bad enough NOW when the fiber between your small-to-medium size community from the backbone is cut, now imagine that on top of missing the important conferance call because the t-1 for the phones is down, you cant even type out the reports you need to do in Word! this would cause the business world to converge on redond with pitchforks in hand (when the managers realise that it isnt the techies fault)
    3: Common logic: "We only pay for computers once, why should we pay for software 3-5 times over the 3-5 year lifecycle"
    4: Road warrior -- Broadband isnt everywhere yet -- 'nuff said
    5: Security concious people do not ever want their secure documents touching a server they dont controll -- even if it is "just" a temp cache.

    • I don't know that it will "never ever" work but I think the points about bandwidth are good ones. That and the licensing scheme has to be worked out to the point that no net connection is required for reasonably long periods of time. We have laptops that fly around on our planes and passengers use them all the time while flying. Many of them haven't been on a network since we first set them up....~6-8 months ago.

  • A matter of choices. (Score:2, Interesting)

    by vethia ( 900978 )
    In my mind, we should only have to pay for our software as many as we pay for our other appliances and electronics: as often as we feel the need to upgrade to better models. I buy a new computer or television set and I consider it my own until it either wears out or becomes obsolete. Software doesn't exactly wear out, but timelines of growing incompatibility are inevitable with any software release, and that's what people should have to pay for: new versions. If I like my old Windows 98 machine just fine, l
  • Anti-virus programs are an obvious example of a case where the subscription model is appropriate. There is a clear need for continuous updating. There are other cases, such as stable corporate applications that function within a corporate environment, where periodic major upgrades are required, driven by business need, but until the buying round starts the exact nature of the changes is unknown. In those cases, subscription may not be appropriate, though there may be a support contract.

    I think too you need

  • This is a topic that really gets my goat. I can appreciate paying a fee for software updates, but programs like Quickbooks extort money from their customers, big amounts of money, just to update the tax tables in the software. This is ridiculous and someone should start a class action lawsuit. The software ceases to function properly until you pay them for these tiny bits of data that are otherwise public information.
  • wow.

    what a bullshit slanted article.

    run be scared! wooo! the boogey man is coming!

    Ignore the fact that more and more, Open Source is taking over, giving easy options to avoid the software vendors. Let them charge however they want. YOU DONT HAVE TO BUY IT.

  • The problem with this proposed idea of subscription-based software could backfire in the future in a spectacular way that could cost an absolute fortune in support. The problem is this, you buy a computer and take out a support contract, you run the computer for a few years and it works fine, until the support for the software runs out as the vendor does not wish to spend more money on that particular product. Fine, you might save, upgrade to the latest version of that software. But what happens if the l
  • I'm not even going to comment on the merits of subscription-based software pricing. What I will say, however, is that the average guy/grandma/Joe Sixpack will not go for it. How do you convince them that they need to write a check to Microsoft every month to keep using Windows? Or that the anti-virus software they have is just important enough to keep paying month after month to use it?

    In the past, they got it for "free" with their computer, and now they have to continuously pay for it? Ridiculous.

  • The "invisible hand"... (Score:4, Interesting)

    by Pig Hogger ( 10379 ) <pig.hogger@gmail ... m minus caffeine> on Saturday October 29, 2005 @03:51PM (#13906021) Journal
    As always, the "invisible hand" of the almighty Holy-Market will prevail.

    Like in everything, some suckers will gladly fork-over their dough for overpriced, under-achieving closed-source proprietary crap, and others will simply use open-source free software for the same result.

    Solutions That Suck(tm) will simply go the way of the dodo.

    The market will decide who will be the winner, thanks to the level playing field.

    • Re:The "invisible hand"... (Score:5, Insightful)

      by Kjella ( 173770 ) on Saturday October 29, 2005 @05:11PM (#13906329) Homepage
      As always, the "invisible hand" of the almighty Holy-Market will prevail.

      It's not exactly magic. "The market decides" only applies where there is working competition and there are rules to restrict dominant players from abusing their position. There are many cases where there is no working "invisible hand"

      Like in everything, some suckers will gladly fork-over their dough for overpriced, under-achieving closed-source proprietary crap, and others will simply use open-source free software for the same result.

      Suckers come in both varieties, some zealots will gladly use open-source free crap, and others will use cost-effective closed-source proprietary software. Once ideology gets in way of your better judgement, you're likely to make poor business decisions.

      Solutions That Suck(tm) will simply go the way of the dodo.

      Really? I've seen many lousy standards prevail by simply undercutting the superior solutions, gaining enough momentum and then keep rolling. More often than not because the dominant player (or a coalition of all but the dominant player, because of key patents/licensing) set the de facto standard.

      The market will decide who will be the winner, thanks to the level playing field.

      What level playing field? Yes, certain things are looking bright, but I'd say that is despite an uneven playing field. YMMV.
      • Suckers come in both varieties, some zealots will gladly use open-source free crap, and others will use cost-effective closed-source proprietary software.

        You know of some cost-effective closed-source proprietary software? I've been a sysadmin for a fair while, but I haven't found any yet. All the closed-source proprietary software I've ever encountered has fallen into one of two categories:
        • Crap
        • As expensive as it can possibly be and still make the sale

        And the latter category is rare. When I talk to the bu

  • Hey, I'll keep both sides happy (Score:3, Informative)

    by Hosiah ( 849792 ) on Saturday October 29, 2005 @03:56PM (#13906044)
    To the people defending this policy and insisting there's nothing wrong with it: ENJOY! Hey, if you're that happy about it, I hope they jack the price up to a million smackeroos a month, just so you'll be tha-a-a-at much happier! Saves you the trouble of raking your spare dollar bills into a pile and burning them at the end of the month. And oh, how burning money stinks, and the smoke is hell to get out of the curtains!

    And for everybody else who has better uses for their cash (like groceries):
    http://www.linuxlookup.com/html/main/iso.html [linuxlookup.com] Get Linux.
    http://www.linuxiso.org/ [linuxiso.org] Get Linux.
    http://distrowatch.com/ [distrowatch.com] Get Linux (or BSD).
    http://www.livingwithoutmicrosoft.org/ [livingwith...rosoft.org] Learn more about alternatives.
    http://www.linuxquestions.org/ [linuxquestions.org] Ask a Linux pro.
    http://madpenguin.org/cms/ [madpenguin.org] Read reviews of Linux.

  • Microsoft Already get's paid more than once.... (Score:4, Insightful)

    by eluusive ( 642298 ) on Saturday October 29, 2005 @03:58PM (#13906056)
    Microsoft already charges many people several times for a copy of windows by restricting OEM versions it to specific models of hardware. Many people I know have bought several dells since windows XP came out. Every time they have to buy a new copy of windows. Not to mention the several academic facilities I've worked at which have site licenses for windows. Every time they purchase new hardware they get to buy OEM copies of windows with it, which promptly get erased.
  • Many small software companies making old DOS programs for narrowly targeted user (courier companies, schedulers for barber shops, etc.) went down that path of requiring user to enter a special code [google.com] every year to make software work. This code,of cause had to be purchased from the vendor annualy.

    Small businesses to which such software was geared to were trying to beat those restrictions any way possible: changing system date, searching for hacks online (as soon as Internet came around), and SWITCHING to dif

  • Management won't understand. (Score:3, Insightful)

    by Fortran IV ( 737299 ) on Saturday October 29, 2005 @04:07PM (#13906102) Journal

    What I've not seen so far is any comment that discusses how you are supposed to explain to your boss, the guy who has to pay for everything—somebody who is used to buying a truck or a welding machine or a sheet of plastic and then being able to use it any way he wants, including custom modifications—why you can't buy software any more.

    It's hard enough to explain software licensing to management, the idea that you only buy the privilege to use the software without being able to rewrite and customize it. (Or even debug it decently. My boss just doesn't seem to understand why "The programmer screwed up" is generally the most detailed answer I can give him when he asks why a program garbled his monthly report or cut the wrong holes in a sheet of stainless steel.)

    To management, computers are a capital purchase to be depreciated over several years, and the software that comes with them and makes them useful should be the same thing. Maintenance is for the actual cost of things that get used up or wear out or break, like gasoline and electricity and tires and keyboards. If you want to put a new motor in your truck, you just pay for the damn motor—you don't pay General Motors a fee for the privilege.

    My boss gets aggravated enough at the idea that after he pays $20K for a software package, the company expects him to pay another $500 to $1500 per year to get maintenance and updates—but at least the software itself still runs after the first year.

    He does understand that tax tables change, and new viruses develop, but it's still a battle to get him to pay for annual updates to antivirus or accounting software.

    But if I have to tell him that the software itself will stop working after a year, he's going to go ballistic, and I doubt he's the only boss out there who will. Shifting software to a subscription-only model will simply mean that thousands of small companies will remain on their current software well into the next decade (or until OSS becomes a large enough force in the marketplace to impinge on their awareness).
  • Title of post contains several logical errrors:
    * First, you never own software, if we talk about prioritary ones, it should be clear; All you have some limited rights to use copyrighted work of software owner. Hell, sometimes you don't have rights to have even backup copies;
    * Second, it is not *our* software, as we never own it, actually;

    Yes, I know it is disturbing, people don't like these facts, as they point out - you have to pay about those cool things like software inside our computers.

    Of course, you c
  • The goal of a business is to maximise its profits - it is an amoral entity. If they think they can make more money with a subscription model, they will switch to it.

    When it comes to setting pricing models, customer expectations are just as important as delivering value. A great example is the switch from landlines to cellphones. Landlines involve miles of expensive copper coming to your door, and there's a monthly line rental to amortize the cost of installing and maintaining that infrastructure. With a cel
  • I'm surprised this isn't an Ask Slashdot question, because that's normally the category questions with bleeding obvious answers like this one are asked. The only right answer? Zero [gnu.org].
  • With a few exceptions -- OS X and MSO -- I don't buy my software. I write it myself or go to sourceforge.net. As a larger number of easier to use OSS packages make their way to the mainsteam -- Firefox, I'm looking at you -- I suspect more people will move into my camp than vice-versa.
  • Can't this be seen as a form of racketeering?

  • Mathematica already does this.. (Score:5, Insightful)

    by wanax ( 46819 ) on Saturday October 29, 2005 @05:14PM (#13906351)
    I get Mathematica under an annual subscription system (called Premium Service), which allows you to always download the newest version and it works great. Of course, Wolfram also lets you buy a specific version of Mathematica and keep it, so one is not forced into the subscription model. For pieces of software that are in the vein of Mathematica (or Matlab, or any other specialized technical application), I think that this model works well, because you're going to want the updates. I personally prefer paying an annual fee and getting a new license code every year (and yes, the subscription Mathematica stops working after a certain date unless you put in the new license code, but it doesn't have to phone home) than having to shell out a new version every year or two to stay up to date.

    However, for something like my operating system, or any other program that I rarely need to upgrade versions, I think this is a horrible idea, because I'm more concerned that the damn thing work, and continue to work with minimal expense and/or effort on my part. The possibility of the software not working because I don't have internet access on some day (or everyday, with some phone-home verification system) would be intolerable.

  • Subscription is the only alternative to piracy (Score:4, Insightful)

    by Merdalors ( 677723 ) on Saturday October 29, 2005 @05:23PM (#13906382)
    I haven't seen anyone here who really gets it: a subscription model is the only way to solve the equation that quality = price.

    Here's the argument:

    • Quality costs money (cars, suits, restaurants, etc)
    • Software is one of the few products that can be reproduced at little cost.
    • If a developer invests lots of money to develop quality (ie. expensive) software, and charges a reasonably high fee, most users will make illegal copies. If the developer cannot receive compensation, the developer will go out of business.
    • A subscription model simply spreads out the price over time. By requiring registration, it also reduces the number of unauthorized users.
    • If you're not prepared to pay a fair price for quality software, then you should buy the one-time $29 product, put up with the bugs and shut up.
    • Want impeccable quality for $29? What, you go to Macdonalds and demand filet mignon for $1.99? You walk into the Porsche dealership and demand the Carrera for $11,900?

    Piracy is the single greatest obstacle to improving the quality of software. In life, you don't get what you don't pay for.

    • "I haven't seen anyone here who really gets it: a subscription model is the only way to solve the equation that quality = price."

      If you can state that subsription software will improve the quality of software with a straight face, you must be a lawyer.

      And I'm afraid most lawyers don't deserve that insult....
    • I wouldn't pay anyobody more than $1.99 for a filet mignon. Sure it's tender, but it's also flavorless. It's the blandest cut on the cow. Filet mignon is a choice cut of beef for people that don't like beef, but do like to cook it too long.

      more seriously though. I don't want to buy a subscription because I don't want every new version as soon as it comes out. If you bought a porche last year, do you really need another porche this year?

  • How many times should we pay for our music ? (Score:3, Insightful)

    by Alain Williams ( 2972 ) <addw@phcomp.co.uk> on Saturday October 29, 2005 @05:38PM (#13906444) Homepage
    Much the same thing with the music pirates: I have some albums on: vinyl, cassette and CD. That means that I have paid 3 times for a 'license to listen/play/...' the same music.

    There must be something wrong here - Yes I should pay for the new medium, but as we all know that forms a small part of the cost of producing an album.

    I suppose it just shows that I am a mug who is willing to be ripped off by the music pirates^h^h^h^h^h^h^hdistributors.

  • Excellent! More users of F/OSS software! Thanks! (Score:3, Funny)

    by crazyphilman ( 609923 ) on Sunday October 30, 2005 @12:26AM (#13907681) Journal
    Dear Bill:

    Thanks! It's really nice of you to pound the final ashen stake into the heart of your business model. Lord knows we open-source users have been trying to do it for years to no avail. Now that you're willing to do it FOR us, we anticipate a bright future for all involved.

    Deciding to screw your customers not once, not twice, but ANNUALLY in PERPETUITY is a master stroke. We couldn't have thought of something that evil ourselves (OUR general way of doing things is to NOT charge the customer annually, in perpetuity) and if we had, most of the FOSS community would have told us we were conspiracy theorists.

    So thank you, Bill, you have done the world a great service. I wish you the best of all possible retirements, spending your tractor-trailer trucks full of cash around the world as you see fit.

    Cordially,
    The collective users of F/OSS software.

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