In the second part of our Mythbusters series, we’re addressing the widely held belief by manufacturers that the total cost of ownership is higher for subscription software versus purchasing a perpetual license.
First, let’s discuss the difference between the two. Subscription software (Software as a Service) is priced on a monthly or annual basis and is an on-going subscription. A perpetual software license is purchased up front, in a large, lump sum and allows the organization to use the software indefinitely.
20 years ago, perpetual licenses were the only way for manufacturers to buy software. Today subscription licensing is rapidly overtaking traditional models.
LONG TERM COST
One of the reasons for the rapid growth in SaaS models is the experience by IT leaders that the long term and hidden costs associated with perpetual software outweigh that of subscription models.
Manufacturers choosing traditional software models often do not take into account the high cost of maintenance, upgrades, infrastructure and backup requirements. Add to that the human capital costs including project management, security, hardware repairs and software development.
In the SaaS model, the subscription cost includes everything you need to use the software, including maintenance, upgrades, storage, servers and access to support. SaaS vendors can also provide greater security measures with the most current protection for data, applications and systems.
“Subscriptions provide better entry-level pricing and the ability to add features as customers mature and gain value from the initial experience,” says Laurie Wurster, Research Director at Gartner. “This is especially critical for new entrants who want to lower financial barriers to new technology adoption and create sustainable, recurring revenue streams.”
Another hidden cost is the short lifecycle of perpetual software which can become obsolete in a matter of years due to factors such as supported hardware and companion software.
KEEPING PACE WITH INNOVATIONS
In addition to cost, the rapid pace of technology innovation has left many traditional software options obsolete. Subscription software vendors continually provide new releases and application updates, most of which are available to all subscription users at no additional cost.
In modern manufacturing, technology is changing so quickly that organizations having to wait for internal IT to deliver new functionality are finding they are falling behind competitors that have flexible and updated SaaS technology. Capital budget restraints also hinder the modernization of perpetual software.
Automation Intellect’s SaaS licensing model offers a low and predictable monthly fee and rapid implementation that allows manufacturers to start seeing value within a few short months. Our Asset Performance Management (APM) platform leverages best-in-class IIOT, cloud and analytic capabilities.
Automation Intellect provides instant, enterprise wide, visibility to asset performance that will help drive immediate improvements in output, downtime and quality.
- Implementation is a simple, low disruption process that takes just hours
- We handle all of the tag and configuration files for you!
- Agnostic technology can connect to all devices and machines
- Integrates with existing ERP and MES systems
- Scale fast within a plant or organization
- Only pay for what you monitor
- Eliminate waste, increase yield and quality
Eliminate manual processes, gain complete data integrity and have confidence knowing Automation Intellect is watching your machines for you
