The ever-evolving software subscription model

I’m sure you’ve seen the ads: “Get Perpetual Office for a dirt-cheap price that’s so cheap it’s too good to be true.”  

It is, though they don’t phrase the pitch quite like that. Instead, the advertisement says: “One-time purchase. No subscription. This is a Microsoft Office 365 account that activates up to 5 devices on all supported platforms, including Windows, macOS, Android, iOS, iPadOS, Tablets. You can install and activate as many times as you want on all 5 devices. Activation is permanent and lifetime. You can always reinstall or transfer to another device. Cloud storage is not included. The login name provided cannot be changed or merged with a personal account. Microsoft Office 365 includes Word, Excel, PowerPoint, OneNote, Outlook, Access, and Publisher. This software is multilingual, you can choose your language during installation. Digital Download – Redeem instructions will be emailed to you after purchase.”

First off, be aware that the product described does not exist. A Microsoft 365 lifetime license that can be installed on five different computers isn’t real. While the Microsoft Office site does advertise a version that can be used without a subscription, it can only be installed on one computer system, not five. In addition, the price tag of that alternate-universe version of Microsoft 365 is vastly different than the real Microsoft offering.

I’m still not sure why doesn’t Microsoft go after vendors advertising these too-good-to-be-true versions. Maybe it’s because they sound genuine. I do know that for years users have joked about the complexity of Microsoft licensing. It’s so convoluted that if you called the company with a licensing question and didn’t get an answer you either understood or liked, you could call back and ask again. Chances are you’d receive a totally different answer. If you didn’t like it that one, you could call and try for answer number three. If two of the three answers were similar, chances were those two were at least mostly correct.

I’m focused on licensing because more and more companies like Microsoft are moving to subscription models as older versions of their software age out of support. Case in point is the business email platform of Exchange. On April 11, support for Exchange 2013 will end. And while it will continue to run after that date, it’s not wise to do so for business use. Many argue that no company should be hosting on-premises email now, opting instead for hosted platforms that can monitor for and defend against attacks. But making that move also means…moving to a subscription model.

Licensing for all sorts of software that used to be buy once/use for years has moved to subscription models. Another example is QuickBooks, the small-business accounting platform. For years, you could buy a version that would work indefinitely as long as you did not use it for payroll. Then came the subscription models. QuickBooks Enterprise went to an annual subscription model several years ago. Now, the desktop version of QuickBooks has followed suit. (If you have QuickBooks and do not use it for payroll, stick with the 2022 versions or earlier. Moving up to the 2023 version means you’ll have to pay an annual subscription fee.)

As is often the case, the change in licensing has been accompanied by a change in the features delivered by each version. The online version of QuickBooks is actually better now than the desktop version — especially if you are in a work-from-anywhere mode. But if you do bookkeeping for numerous companies, switching to an online subscription for each one could quickly get costly.

Licensing and software changes are also coming to Intuit’s point of sale version of QuickBooks. As Intuit noted, “…the platform on which the software is built is unique, requires complex maintenance and makes introducing new features very difficult. Consequently, we’ve made the decision to discontinue QuickBooks Desktop Point of Sale 19.0 as of October 3, 2023. There will be no future versions of QuickBooks Desktop Point of Sale software and we will no longer sell QuickBooks Desktop Point of Sale to new customers. We are working with Shopify to provide an optional POS solution.” Clearly, Intuit has decided to stop supporting various offerings and change the licensing for them.

Usually, vendors switch to online versions because it’s easier to build a platform that works in a browser than it is to code for the various flavors of Windows macOS. It’s also easier to serve the wide variety of devices we now use, from computers to tablets to phones, on a cloud-based platform.

And let’s face it, vendors are moving to subscriptions because what business wouldn’t want a more predictable revenue stream? While you might want to continue using perpetual software, the market is going in a different direction. So it’s important when evaluating online software to stop and review the pricing and features. And remember, if the terms seem too good to be true, they’re usually too good to be true.