The future of software would appear to be subscription based software. This has been deployed successfully by the gaming industry for years, look at games like World of Warcraft for an example. Now we have some major players moving toward a subscription based system for their software. Two examples I want to look at are Microsoft and Adobe. Let's start by looking at Microsoft's new Office 365. For the new Office they offer two models for purchase. You can buy the software outright on a per computer basis, or you can go with a subscription method. If you want to buy the software outright there are three versions. The Home and Student version comes with Word, Excel, Powerpoint, and EndNote. It will cost you $139.99. The trick with this version is that it is not to be used for commercial purposes. So no work from home, unless your employer is paying for a fully licensed version at work. Very confusing. Let's say you are self employed and you want the software then you would get the Home and Business version for $219.99. It comes with all those listed above plus Outlook. If you need Publisher or Access you would have to go with Professional for $399.99. That is a one time purchase for one computer. Those are similar choices to what Microsoft has been offering, but now they are offering a new subscription option. It comes with all those applications listed above, plus you get 20G of storage on SkyDrive and 60 minutes of Skype calls per month. And you can install it on up to five devices Mac (Mac would get Office 2011) or PC. All of this costs you $9.99 a month or $99.99 a year. Since you are essentially getting the pro version of the software for up to 5 computers you are looking at a value of $1,999.95. You will get updates as part of the subscription. It is in essence a good bargain and for the first time makes Office an affordable option for home users.
Now you might ask, well how is this a good move for Microsoft? The idea of course is to hopefully get more home users at this price point, but it also parallels the moves they are making for corporate customers. For corporate, government, and educational customers they are making a big change. Let's say you run a small law firm. In the past you would need to purchase the Office suite, buy a server, hire an IT guy to setup a mail/file server, etc. Now with Office 365 here is what you will get: Office, Lync, Sharepoints, and Exchange. All handled by Microsoft who will also give you file storage in the cloud and by the way approved by the US government as meeting their security standards for email and data storage. You no longer need your own servers, you no longer need an IT guy and with Lync, Sharepoints, and Exchange you get products that you may have never had before. Lync is a meeting tool that supports text chat, audio chat, video chat, file sharing, white board, etc. Sharepoints is a web based interface that lets you build public web sites as well as internal sites for collaborative work. Exchange is a corporate level email system with full calendar support. They of course are gearing their offerings from small businesses to enterprise customers. Microsoft is not the first to start offering services like this, they are in some ways coming on board late, but when a big company like Microsoft goes all in on offering services through subscription you know the future is here and this is the future.
Adobe is another company that is going all in on the subscription model and again the value seems good. Let's take a quick look at cost. Let's say you need to buy the Adobe Master Suite. That will run you $2,599. You can sign up for their subscription service, which will give you all the Master Suite products, plus some others, plus 100G of storage for $49.99 a month. That is expensive, but it would take 51 months to get to the cost of the one time purchase of $2,599, so it is in essence a good value. Even if you only want Design Standard at $1,299 it would still take 26 months of subscription fees to get there. Where the Adobe model falls a bit flat is if someone only wants one product, like Adobe Pro which is the most common product we buy for people. How Adobe handles that down the road I'm not sure. As I said they have single product subscriptions but only for certain products. They also offer educational pricing and it is reasonable at $19.99 a month.
Adobe has been very open at saying they are not sure exactly how their different purchasing options will look in a few years, but they have said they will be offering some products exclusive to the subscription versions of the software. The push is on to move people to a subscription model.
The IT world right now is going through a major shift in many ways, but it would appear that moving forward our software will more than often be something we subscribe to rather than something we purchase outright.
TECH NOTE!
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