When should software be a subscription service?

“The excellent Mac utility app TextExpander is moving to a subscription pricing model, and this is creating a dialogue about the justification for such a model,” Kirk McElhearn writes for Kirkville.

“From a one-off purchase of $35 – plus upgrades every couple of years, usually at about half that price – Smile Software has moved to a monthly subscription service that would cost $47.52 per year.,” McElhearn writes. “The company defends this pricing by explaining that they’ve moved the management of the software’s data to a web server, but for most individuals, this service is unnecessary.”

“This has raised the question of when software should be sold as a subscription,” McElhearn writes. “Developers may say that they don’t have to hold back features for a major upgrade, and can add new features at any time, since the subscription includes every upgrade to the apps. Consumers, however, see this recurring payment as often stifling innovation; once a company has guaranteed income, and users are locked into an app, they are unlikely to switch, and the developer has little incentive to improve their products.”

Read more in the full article here.

MacDailyNews Take: We hate software subscriptions so much that we’ll actively look for alternatives that let you purchase an application outright. See our long-ago move from Photoshop to Pixelmator, for just one example.

28 Comments

    1. I am self employed and my income fluctuates wildly. Sometimes I earn virtually nothing while another month I earn so much that I scarcely know what to do with it. As a result, I avoid regularly monthly outgoings and prefer to pay for things outright when I have the money to do so. My house was bought outright without a mortgage and my cars were paid for with cash too. I buy nothing at all on finance deals.

      The subscription model is the very opposite of what works for me. I’m quite happy to spend money on expensive software that will help my business, but if I have to commit to a regular monthly payment, I would look elsewhere.

  1. Ideally, only as an option. That said, I’m more open to it when it’s primarily service based, as in there are servers that need to be maintained for it. Think Apple Music, Dropbox, Pandora, etc..

    1. It’s funny how many adamant “Never!” comments there are here since my comment of “ideally, only as an option”.

      I’m not sure how SAAS (Software As A Service) models would even work without a subscription model.

      Here’s why I think optional subscription software can be a good thing:

      For high end, expensive software, the upfront cost can be prohibitively expensive. When I started my company, we had to make some really tough decisions around purchasing high end media and server software. Had subscription software been available as an option, we would’ve been able to have more users on more software at a much lower startup cost.

      I’m not saying that it’s for everyone, and I certainly understand wanting to purchase software as I haven’t upgraded Adobe Creative Suite since it went subscription only, but I do see how optional subscription options work well for some people.

      Microsoft Office is a good example of this. You can buy it or subscribe. The subscription price is $77 for Home Office for 5 users which includes 1TB each of OneDrive and 60 minutes a month per user of Skype (world-wide). This is a pretty damn good deal, but be that as it may, the ability to purchase still exists.

      I’m not sure why someone would complain about both options being available.

  2. Software as subscription is a terrible move for consumers. I will never use subscription software. Will never upgrade Photoshop. Won’t even use the “one year FREE!” disc right next to me right now for Microsoft Office. Never never never.

    1. And if enough people follow Higo, the companies will relent.

      There are some super high end programs, like 3D CAD which I use, that have such significant additions and changes over time, that I don’t mind paying for the yearly release or a subscription as they are about the same price.

      These programs tell you this up front and you have a choice to pick something else.

      There are a lot of truly professional programs that fall into this category where there is a $2000+ yearly upgrade or subscription. When you are in an industry that exchanges data all the time in one of these proprietary formats (3D CAD for instance), if you want to play, you have to pay and the productivity & business benefits pay for the yearly upgrade/license.

      1. Bo,

        Not true for me. I have high end 3D CAD. I update every 2-3 years or so, depending on the quality of new features, which is rarely worth the cost.

        I still get updates to the (non sub) version I have. I see no value added in a subscription, and about 2X the cost.

  3. I can’t imagine a situation where’d I’d willingly opt for software as a subscription service. If you unsubscribe at any point, your data is useless — this is not attractive to me.
    Now, price it 2 to 3x the previous perpetual license price and try to entice me into a subscription model? You’ve got me laughing all the way to the competition. Like AText, for $5. Or the iCloud-based built-in text substitution for iOS and OS X — I can justify a lot of working in Preferences to save $48 a year.

  4. Subscription software is nonsense.
    They have found a way to kill their market.
    Good luck!

    Btw, I am back on after effects CS6, Adobe subscription model suck eggs… There is absolutly no added value on the CC beside being targeted with ads and update constanlty.

    Adobe sucks so bad, gouvernement should declare Photoshop, illustrator and After effects public domain… As for the rest Adobe could keep their shitty subscription for the rest of their apps: Dreamweaver, Flash, fireworks… Boy! Feels like the ’90!

    1. Adobe bought Freehand, Dreamweaver, Fireworks, Flash and Flash Player years ago from a company called Macromedia.
      For a short time, Adobe kept employed some Macromedia key software employees to help Adobe get a handle on all of Macromedia’s web software (Adobe took an early shotnat developing their own proprietary web design software, but it wasn’t very good OR well received and development didn’t last long. Macromedia was in trouble, financially, Adobe had the finances to buy Macromedia and they did.
      They, first, killed off Freehand, then took over development of all of Macrmedia’s web design packages as well as having to constantly care for and update Flash and Flash Player.
      I think all these years Adobe has done a real poor job with all of this software, especially Flash and Flash Player. Adobe software designers and software engineers just never understood any of Macromedia’s software packages and they still don’t.
      Look how long it takes Adobe to release Flash updates when a vulnerability gets exploited!
      After all this time, Adobe Flash Player shouldn’t have ANY major vulnerabilities if Adobe’s software team ever knew what it was doing!
      I think the only reason Adobe bought Macromedia and all of its software was to just to kill off Macromedia FreeHand vector illustration software.
      It was Adobe’s vector program, Illustrator, only competition and FreeHand was always a much better vector application than Adobe Illustrator and its presence was hurting sales of Illustrator and Adobe couldn’t deal with that.
      So, Macromedia was in trouble and basically, Adobe, strong-armed their way to a buyout of Macromedia, then shortly after, with only one more major release of FreeHand 4, killed it soon after.
      That is what Adobe is! A bully!
      That is also one of the reasons the relationship of Adobe and Apple parted ways, too!
      Adobe is a corporate bullying company.

  5. I love text expander but its a luxury not a must have. This is clearly just a money grab. Textinator here I come. I suppose when they did the math they could afford to lose 66% of their installed base and still make more money so “why not”…I think they about to understand “why not”. I’m betting they lose MORE than 66%. People hate subscription software ESPECIALLY at these crazy high prices.

  6. When I put data in application’s files, it may remain untouched for 5-10 years, but still be valuable reference materials and sources for my work!

    I want to be able to read those files again without having to pay a yearly fee or “buy” the program again.

    I accept I will have to pay an upgrade fee if I want bug fixes and more features, but I should not be forced to do that if I want to stay with the original software version.

    The worst case scenario (which I have right now) is when a software company with proprietary file database goes belly up. Then I can’t read my old files unless I boot up a 10-15 year old OS clone and run the old software.

    Once I buy, I ought to be able to read those files forever in my opinion. They are my files. I had paid the company the fair amount they asked, I put my data in the files and I ought to be able to get the data back without charge in the “old” format.

  7. I became aware, years ago that the “subscription service” is more of a “window of operation” relationship with the hardware and software. That interface of hardware and software is well understood by Apple.

    When an operating system is upgraded, older (purchased) software may fall by the wayside. The same may happen when hardware is updated.

    All three need to work harmoniously, the software program, the operating system and the hardware, the requirements.

    A software subscription service is a bit of a misnomer because one can find that a software update no longer functions on one’s machine if the machine is not upgraded as well. All sorts of situations can arise from that but subscribing to a software service will more than likely require a hardware upgrade from time to time.

    That’s why I like purchased software and hardware. Apple’s hardware lasts a long time, an old LC running an image writer still churns out MacPaint pictures. It’s not a good model for other companies who want a constant stream of money.

    I’d rather own than subscribe. Bye bye Photoshop.

  8. Subscription models suck on many levels but constant updates or pushing out the latest feature ASAP are no feature as much as relatively long periods of stability for productivity’s sake. Yearly updates are plenty good and always have been. Even then people are loathe to upgrade! Plus Adobe still doesn’t offer a special rate to video editors – After Effects, Photoshop & Premiere Pro.

    A friend of mine on the PC side said there are also huge problems with Premiere Pro in Windows 10 that kept him from working a whole day and parts of other days and he’s a paid subscriber!

  9. I categorically will not do subscription software.

    I don’t need every upgrade anyway and in fact more often only need it to maintain system software compatibility versus new features. In that case I appreciate the upgrade discount.

    I will not be the customer of any subscription based software.

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