"Software as a service (SaaS)" & the "Subscription Software" delivery model is fast entering the main stream. Why?
Incentivised software development cycle:
Subscription software revenue is directly tied to product performance & outputs. The customer purchase decision is renewed with each and every payment & as such software must maintain its competitive advantages. This revenue pressure ensures that the development cycle is shortened and the subscription software remains at the frontier in its field.
Ensure software compatibility & delivery:
Hand in hand with software development is software compatibility. As subscription software revenues are also tied to individual client requirements & compatibility. The success of the service provider is dependent on the delivery of a relevant service. This ensures the customer is not left in a situation where despite significant investment they have a product that does not deliver to specification.
Eliminating the product lag:
Performance of perpetual software erodes over the lifespan of the product. Even if the product is industry leading at the time of acquisition it will soon be behind the latest software on the market. Yes the perpetual software will continue to deliver the performance & output that was required at the time of purchase but it will not be delivering to the current day standard. Thus handing your competitors a potentially costly advantage.
Paying for the product in period of use:
Subscription software has an important advantage in terms of spreading costs over the life of the product. The revenue gains & cost savings that the software delivers to your business will fund the cost of the product. This removes the capital funding requirement and eliminates a natural barrier to entry.
Related link:
http://beyondstock.co.uk/about-us/beyond-stock-the-philosophy/epos-and-the-strategic-partnership
Beyond Stock website:
www.beyondstock.co.uk
