Blog_image_061416_AWS.jpgDid you ever rush out to buy the new album released by your favorite artist because you just HAD to get before your friends? On the other hand, did you ever sit by the radio to record all your favorite songs to your mixtape? Or, could you not wait to buy Van Halen’s new 5150 album when it was released? Did you have a favorite VHS tape you popped into your entertainment system to watch your favorite chick flick or high intensity action film? If you broke or damaged one of these “priceless gems,” you had to go out and buy another to replace it!

Okay, my examples are a bit dated, but even in the not-so-distant past (and true to a large extent today); we still have the capability to purchase CDs, DVDs, and Blue-ray mediums – tangible products we can hold in our hands. However, we don’t have to anymore! Now, everything can be purchased digitally! Digital subscriptions are rapidly becoming standard in this brave new world… (While some of us are still mourning our local Blockbuster).

In our digital world, we can have music, film, and software delivered right at our fingertips. You can download that favorite song from iTunes, Google Play, Pandora, etc. and there you have it - safe and sound, no discs to break, bend, or scratch; and if it breaks, you can just download another into your playlist. Simple, right?

Let’s look at how this affects the business world. The advantage of easily available digital software is in both productivity and efficiency – because it is all at our fingertips. Today, digital software has become available to us through “the cloud” or software as a service (SaaS), rather than a product. What this means is that you can purchase software as a service, or subscribe to use it, rather than buying a CD or downloading a purchased executable file. So the question remains, “Do I buy or rent?” Which provides the most bang for the buck?

To determine whether to rent or buy, you must consider a variety of factors such as cost, usage frequency, number of licenses needed, and availability of upgrades. First, let’s look at the difference between cloud software (subscription) and full product license purchase.

Subscription
  • Pay a monthly software usage fee.
  • Subscription includes updates, maintenance, support, and upgrades.
  • Limited commitment. Elimination of unused software.
  • You will always have the latest version of software available through your monthly/yearly subscription.
Purchase (Perpetual)
  • One-time purchase of the current version of the licensed software.
  • Customer may pay an annual % fee for maintenance, updates, upgrades, and support.
  • Full commitment. You buy it you own it. 
  • If a new version of your software becomes available, you must purchase the upgrade license or buy a brand new full product.

Factors to consider when making a decision to purchase or subscribe include:

  • Available funds to purchase a full, perpetual license
  • Finances available to manage future license upgrades, maintenance, and technical support
  • Quantity of full licenses required for your team members
  • How much time will be spent using the software?
  • How soon will the software format become obsolete?
  • How much bandwidth is required for streaming data?

These are just a few considerations when thinking about subscribing or buying. Technology is constantly changing. The trend for data and software acquisition is increasingly rising toward subscription cloud use. Through the cloud, you can rest assured that you will always be using the latest and greatest software versions. Oh, how I wish I could have had a Van Halen cloud back in the day… 

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