What it is: Software as service works as a subscription service rather than an outright purchase.
In the old days, software publishers released new versions of software to generate income. Purchases would usually spike with the introduction of each new release and then gradually taper off. From a business point of view, this made it difficult to predict profits since purchases would rise and climb depending on the update cycle.
Adobe made the first bold move to a purely subscription service. If you want to use Adobe’s software, you have to pay a subscription fee. Microsoft was the next major software publisher to follow the subscription model with Microsoft Office 365. The big difference between Adobe and Microsoft is that Adobe caters to high-end graphics professionals while Microsoft caters to the corporate user.
Individuals can still purchase Adobe’s software but many are opting for less expensive alternatives. Similarly, individuals may be purchasing Office 365, but every year when they have to renew again, the big question arises: Do I really want to keep paying to use software already installed on my computer?
There’s the dilemma. If you’re a graphic artists, you’re essentially tied to Adobe’s software unless you’re willing to make a break and purchase competing software instead. If you rely on Microsoft Office, you have to ask yourself if you absolutely need Office 365’s features. For some corporate users, the answer is yes. For some individuals, the answer is also yes. Yet many individuals only use a fraction of the features in Microsoft Office, so the need to constantly pay every year to use Office 365 remains questionable.
IN the old days, buying a fully copy of Microsoft Office might cost you $495. However, buying an annual license to Office 365 costs at least $69.99. Use Office 365 for several years and you essentially could have paid for a complete copy of the office suite. The main advantage of Office 365 is that you get constant updates.
So the question is should you keep paying for software as service or not? Software publishers love the idea of software as service because it smooths out revenue streams and makes profits more predictable and less erratic. Yet for individuals, software as service is a mixed bag. Constantly using the latest version is a benefit along with the lower initial cost. Yet do you need the latest features and in the long run, do you want to pay more for a subscription rather than buying the software outright?
Software as service is great for large software publishers but not always so great for many individuals. the bottom line is that if you depend on a particular feature, paying an annual subscription fee might be worth it. If you just use a fraction of the features, then paying an annual fee can get annoying and remind you to look for alternatives as quickly as possible.
Software as service won’t go away and Microsoft hopes to make Windows available as a service. When that happens, expect individuals to rebel since they expect an operating system for free (or at least as part of the price of buying a new computer).
Microsoft may have success with productivity software like Office 365 as a service, but the moment they try making Windows a service with an annual subscription, that likely won’t work. After all, people use computers to run specific programs, not to run specific operating systems. They only choose an operating system that lets them run the programs they want. Operating systems are largely irrelevant to the minds of most people.
If people have to start paying for an annual subscription to Office 365 and Windows, now the annual fees and reminders that they’re paying for something they already have will likely get annoying. People may stands for paying for one software subscription service, but once you start demanding multiple software subscriptions, especially from the same company, that’s when people will likely rebel.
Software as a service makes sense for some people but not for everyone. Adobe has already alienated many people by abandoning their Adobe suite completely as a purchase. Microsoft has successfully transitioned Office 365 as a software service, but watch out if they try to do that with Windows. Software as service may work, but if users feel they’re being nickel and dime constantly to pay for features already installed on their computers, software as service risks a backlash.
Software as service forces users to make more decisions and the more decisions you force on people, the more confusing and complex computers start to get. There’s a place for software as service, but there’s also a need for clear choices and alternatives as well.