In our final exploration of common SaaS pricing models, we turn our attention to the somewhat less common, yet still relevant, Perpetual model. This approach, reminiscent of traditional software licensing, involves a one-time purchase fee for a specific version of the software. While the subscription model dominates much of the SaaS landscape today, certain companies still offer this “buy once” option. Let’s take a look at some examples:
It’s important to note that the lines can sometimes blur, and even companies offering perpetual licenses often have additional costs for maintenance, support, and upgrades. However, the core principle remains a significant upfront purchase rather than recurring subscriptions.
- Microsoft Office (One-Time Purchase): While Microsoft heavily promotes its Office 365 subscription service, they still offer a one-time purchase option for a specific version of Office (e.g., Office 2021). This allows users to buy the software outright for use on a single computer, though it typically doesn’t include ongoing updates or cloud-based features of the subscription model.
- Microsoft SQL Server (with Client Access Licenses): For their database management system, Microsoft offers perpetual licenses for the server software itself. However, accessing the server often requires purchasing Client Access Licenses (CALs) for each user or device, which can add to the overall cost and complexity. Maintenance and support are typically separate agreements.
- TechSmith Snagit: This screen capture and recording software often offers a perpetual license option. Users pay a one-time fee for a specific version of the software, with optional paid upgrades for future versions. Maintenance and support may have their own terms.
Why Perpetual Still Exists (for Them):
For companies offering perpetual licenses, it can cater to a specific segment of users who prefer a one-time capital expenditure over ongoing operational expenses. This might be attractive to:
- Individuals or Small Businesses: Who prefer the predictability of a single upfront cost.
- Organizations with Limited or Unreliable Internet Access: Where cloud-based subscriptions might not be ideal.
- Companies with Strict Budgeting Cycles: Where a large one-time purchase fits their financial planning better.
- Users with Minimal Need for Frequent Updates: Who are satisfied with the features of a specific software version for an extended period.
The User Perspective: Understanding the Long-Term Costs:
As a buyer of perpetual SaaS licenses, it’s crucial to look beyond the initial purchase price:
- Maintenance and Support: Factor in the cost of ongoing maintenance and support if required. Without it, you might miss critical updates and security patches.
- Upgrade Costs: Understand the vendor’s upgrade policy and the cost of moving to newer versions when they become available. Skipping upgrades can lead to outdated software.
- Scalability Limitations: Consider how adding more users or devices will be handled under the perpetual license model. It might involve purchasing additional full licenses.
- The “SaaS” Misnomer: While we’re including it in our SaaS discussion, the “perpetual” model often lacks the continuous updates and cloud-based nature that defines much of modern SaaS.
While the allure of a one-time purchase can be strong, especially in an era of recurring subscriptions, perpetual SaaS often comes with its own set of long-term cost considerations related to maintenance, support, and upgrades. It’s a model that requires careful evaluation of your needs and the vendor’s specific terms to determine if it truly offers the most cost-effective solution in the long run.
