Subscription vs. Perpetual Models in PCB Software Licensing
Over the years, software licensing has gone through many iterations. Each with advantages and drawbacks, and in some cases there is no choice of how one purchases their software.
In the realm of professional PCB and EDA software, I have seen various methods used to charge for software while also attempting to protect the valuable IP from being stolen and used for free. I am sure a few of us can remember the days when most professional PCB software came attached with a Hardware Dongle, which was plugged into a port on the back of our PC. Before USB, dongles were plugged into the Parallel port along with the printer. It was not uncommon to find many PCs pushed out from their comfy location by a horizontal tower of multiple dongles uncomfortably sticking out the back, sometimes requiring a little makeshift scaffolding just to hold it in place.
Luckily, large hardware dongles are not used as often these days. And at least when they are, they are much smaller and usually in the form of a USB device.
Another method used was a software key, entered when the software is installed to unlock its functionality, and stored somewhere in the event you needed to reinstall later.
Being a long time gamer, another form of software I am quite familiar with is video games. Cartridge based systems were a no brainer; basically, the software and the protection were built into a nice convenient casing with a proprietary console. One would have to blow on the dirty connections or run a pencil eraser over them every now and then to keep the game working, but that was the biggest concern.
PC Games would typically have some copy protection built in to make it difficult to duplicate the media before they moved into using software keys. With software keys, you’d buy the software, install it, enter your software key and you were good to go.
Fast forward to today and we are seeing more and more software and games providing a pay-as-you-go lease option. Many popular Massive Multiplayer Online Games would require one to purchase the game itself and then pay a monthly subscription to maintain access and keep the game up to date. With a steady stream of content and a reasonable monthly fee, this was accepted and has proven to be a good business model in this area. Every year or so, an expansion would be released which would change the game and require a purchase of the expansion to access the new content, while also continuing monthly payments. This was initially met with MUCH resistance, because it was new and there was not yet an established trust that the content and access would be worth it. But we gave it a try and many were pleasantly surprised.
Not all game genres could or would keep up with a steady stream of content updates, but other styles of games also wanted to be able to cash in on this regular income stream. That’s when concepts of Freemium games and Season Passes came into play.
In the Freemium model, one could download and play the game for free after setting up an account, but much of the game was locked. In order to unlock these other portions of the game, one would either pay real money for in-game currency to spend, or play over a long period of time to build up this currency to spend in-game. Some were completely free but peppered users with regular ads to monetize the product, and provided a one time “Remove Ads” purchase option.
In the Season Pass model, you could purchase the game and get full access to everything that was available at launch with the option to purchase a Season Pass, which would give you a period of time so that any new content which was released would be provided to you, usually with an early access period before it was available to other players. Without the season pass, you would purchase the new content as it was released if you decided you wanted it, and of course the total cost would increase, but you had a choice over what you decided to purchase and when.
Video games are an area where licensing models are experimented with quite often, because a mistake can be easily corrected. But due to the resounding success of some of these new methodologies, many software companies re-evaluated how they license and update their software to try to take advantage of these trends, and this includes Professional software.
In the arena of Professional PCB and EDA software, you're paying a much higher price, and understandably, this comes with an intense skepticism from users when a new licensing methodology is introduced or an existing licensing arrangement is changed with little to no notice.
Not to mention the questions that have to be asked in regards to licensing and ownership. When purchasing a professional piece of software, at the front of everyone’s mind isn’t just the software itself, but the access and continued use of their work which they use that software to create.
- What if my dongle fails?
- What if my computer crashes and I need to reinstall?
- What if the company goes out of business or is acquired by another entity?
- Will my work still be accessible, or is it held hostage until the situation is somehow rectified - even worse, what if you cannot rectify?
- What if I am in some remote outpost and cannot connect to the internet to “phone home”?
The thought of losing countless man hours worth of work is enough to scare anyone. Let alone the sense of feeling like you're held hostage by the company you're giving good money to.
In the realm of professional PCB software, perpetual licensing models are still the most widely accepted and most popular. Some will release an upgrade every so often which you can pay for and use, making the move when you're comfortable, but giving the option to stay with the version you have until you're ready and compelled to upgrade.
Some companies, like Altium (who I work for), provide an optional Subscription model for their professional PCB software. Under this model, you pay a nominal yearly fee, and as new content is released, you're free to update your software as it becomes available or whenever you're ready to jump into the new release. If you choose not to purchase the subscription, you have the option to wait until there is a compelling release, and either true up with your subscription fees, or pay an upgrade fee to download and use the most current release.
Under this model, the subscription is the most popular option as it is an inexpensive and worry-free way to make sure you are using the latest and greatest with a yearly fee that easily fits into a recurring budget. However, there are still a small number of users who choose to opt out of the subscription model. This also works well as it provides choice, while also making sure you retain access to your work, regardless of whether you continue to spend money.
Some professional PCB software has moved a subscription-only model. If you stop paying, you lose access or functionality down to a “free” version, which is usually quite crippled. It may allow you to still generate outputs and read and view your files, but forget about doing any further work on anything other than the most basic of designs (which you could have done for free anyway).
To re-gain access to your work, you need to pay for your subscription, jump through a few hoops, phone home to the authentication servers, and then you're able to continue.
The advantage to this subscription-only model is that it allows you to only pay for the time that you need. Maybe you only need to use that particular piece of software two months out of the year, in which case it might be more beneficial to only pay for the time you need and save yourself some money that could be used elsewhere in your business. Another benefit is there is no need to “true up” to get current. But does it provide enough peace of mind? I think not, and I feel that is important.
Perpetual licensing with an OPTIONAL subscription is the best of both worlds for professional PCB software. It gives users the choice to select the option that best suits their needs, and the ability to opt into the subscription when they feel comfortable, providing them with value and peace of mind.
If you have recently been given a shock to your system by a new subscription-only methodology, I would encourage you to look into the alternatives in your space. It might be a good time to make the move and get comfortable with a new piece of software while it is still an option, rather than waiting for the potential of an event out of your control to force you into finding alternatives in an emergency situation.