Perpetual license or subscription: which one should I choose?

At Hackolade, we try to make it easy and convenient to do business with us and respond to customer needs.  This includes a flexible pricing plan.  But so many options may make decisions more difficult.  Here a a few things to consider when making your choice:

1) Accounting

Capex vs Opex: some finance departments wish to capitalize software licenses and amortize then over several years.  They may prefer to purchase a perpetual license.  Others prefer to expense as fast as possible and will opt for a subscription.

2) Cash flow and Total Cost of Ownership

For one license, it is easy to create a spreadsheet and visualize the tipping point between a perpetual license with annual maintenance and a subscription.  Assuming maintenance renewal annually for a perpetual license, it is in year 3 that a perpetual license becomes advantageous for the user, over a subscription.

3) Protection against price increases

Prices are subject to change without notice.  Price increases affect perpetual licenses and their annual maintenance, and also subscriptions.  Some customers purchasing perpetual licenses, also prepay annual maintenance and support for several years in advance.  Others prepay several years of subscriptions.

4) Major upgrades and support

Customers are entitled to free major and minor upgrades plus support for a perpetual license, as long as they have paid for the renewal (first year is mandatory and included in the original purchase.)  If the license key is purchased via our e-commerce platform, the renewal is announced via email a couple of weeks prior to the transaction, and it is charged to the credit card on file.  If renewal fails or has been cancelled, the user retains the right to use the software perpetually, but will no longer be entitled to upgrades or support.

Subscriptions include minor and major upgrades plus support for as long as the subscription is valid.  If the subscription is cancelled or not renewed, the user will no longer have access to the software.

5) Concurrent licenses

Each individual workstation license or subscription is attached to a single "seat".  It means that the license is not attached to a named user, but to a PC (Windows, Mac, or Linux.)  If you have 2 PCs you need either 2 licenses, or a license for 2 seats.  

Some large companies prefer the flexibility of concurrent (a.k.a. floating) licenses.  In this case, you may install the software on many PCs, but only the licensed number of simultaneous users are allowed to use the application.  If the maximum number of seats has been reached, the next user will be denied access to the application until another user exits the application.  This scheme does not require a special server on-premises.

The concurrent approach is possible for either perpetual licenses or subscriptions.  Concurrent licenses are not available for purchase with a credit card.  They are 4 times more expensive per seat than an individual license.

6) Virtual Machines

When installing Hackolade on a VM to share among multiple users, it is important to realize that licensing is not attached to just the machine, but to the combination of the machine and the user login.

If you have 1 machine with multiple users (using for example Terminal Server, Remote Desktop, Citrix XenDesktop or an equivalent Virtual Machine method), you will need one license per user accessing the Hackolade installation on the server.  A license must be obtained for each device on or from which the Product is used or accessed.  As a result, you need a license seat per user of that VM.

Example: having 4 Hackolade users on a single VM is the equivalent of having 4 individual PCs running Hackolade from a licensing point of view: you need 4 license seats to be validated.

Note: individual licenses, concurrent licenses, and subscriptions are all controlled by our license server in the cloud.

Note 2: the above also applies to installations using only the Command-Line Interface in automated mode.  A CLI process requires a licensed installation, just as any desktop user.  If a CLI process is run from a user's workstation, it uses the same license as the GUI application.