When purchasing Integrity Management Software, you may need to choose between perpetual licensing or a subscription (also called ‘Software as a Service’ or ‘SaaS’). So, what’s the best option? At Cenosco we offer subscription-based integrity management software and frequently get asked about the differences between these two models. In this article we’ll try to answer your questions and explain why we think SaaS is the best choice.
What is a perpetual license?
For a long time, perpetual licensing was the default method for purchasing software. It means you pay for a license up-front and get the right to use the software forever. That sounds very simple but is often more complicated in reality. That’s because software needs to be updated regularly. Usually, software developers update their software at least once a year. Purchasers of perpetual licenses need to pay to upgrade their software if they want to access the latest functionalities. If you decide not to upgrade, it often means you’ll no longer receive technical support and it may pose safety risks as well. Sometimes you will also be required to pay a yearly maintenance fee, which can cost between 15-30% of the initial licensing costs.
What is SaaS or a subscription-based license?
SaaS stands for Software as a Service. It means you purchase the right to use the software, for as long as you pay the recurring subscription fee. Monthly or yearly subscription options are most common. Software updates are included in the price and don’t need to be paid for separately. All users automatically get access to the latest functionalities and safety updates. SaaS solutions are typically hosted in the cloud, which means you don’t need to worry about installing, updating, or maintaining them. This makes SaaS solutions hassle-free and cost-effective. Even though the software is hosted in the cloud, options to use the software offline are often still available. Our software also has this functionality.
Why we offer subscription-based integrity management software
At Cenosco, we previously offered perpetual licenses, but we’ve now shifted to a subscription model. Why did we decide to change our model? In short – because it enables us to offer our customers the best solution possible. We’ll explain why.
The initial investment for SaaS solutions is usually a lot lower than for a perpetual license. That’s because you pay a monthly or yearly fee, instead of a bigger amount up-front. This means our software is now more accessible to businesses with a lower budget. Sometimes people think a perpetual license will be cheaper in the long run, but often that isn’t the case. There are a couple of reasons for that:
- You don’t pay fees for support and upgrades (which can be significant).
- You only pay for what you use. If you require fewer functionalities, you can downgrade your subscription.
- You don’t have to hire someone to install, update, and maintain the infrastructure – since everything works from the cloud and is updated automatically.
We’ll host the software for you
With a perpetual license, you’ll have to host the software yourself. This means you need to buy or lease servers and maintain them. You’ll probably also need employees to install, update, and maintain the infrastructure. As a SaaS subscriber, you won’t have to worry about hosting. We take care of that and you can simply access the software through the cloud. This can save you a significant amount of money, (human) resources, and time. We can also boost your virtual machines during times of intensive use, such as during turnarounds, improving the performance when needed.
A perpetuated license may allow you to use the software in perpetuity, but this doesn’t include updates. If you want to upgrade your software (a new version often comes out every year) you will have to pay again, generally around 25% of the initial price. Because our SaaS solution works from the cloud and updates are included in your subscription, you receive updates without having to do or pay anything. The SaaS model actually encourages us to continuously improve our solution, because customers can leave us whenever they choose to. Therefore, to prevent churn, we have to make sure our software keeps matching your needs. Another big benefit of SaaS.
Lower security risks
To keep software safe, software developers need to update their software regularly. That way they make sure vulnerabilities, which could cause security breaches, are patched. A major problem with perpetual licenses is the fact that the software usually is only updated once a year. Furthermore, businesses need to install these updates themselves, and often neglect to do so. SaaS solutions are updated much more frequently, and the updates are immediately available to all users. Therefore, SaaS solutions are safer.
CapEx or OpEx?
Perpetual licensing is typically a capital expenditure (CapEx), while SaaS is an operational expense (OpEx). They both come with advantages and disadvantages. CapEx gives you greater control over your assets and can be cost-effective. However, it does come with high upfront charges and more complex accounting. It also locks you into a certain level of capacity that is hard to change. Many companies prefer the OpEx model over the CapEx model because of lower costs, reduced risk, and improved business agility.
Learn More About our Integrity Management Software: The IMS Suite
IMS is an end-to-end asset integrity management suite. It consists of unified solutions, which operate across all your equipment types and processes. Furthermore, our solutions support users in making smart inspection and maintenance decisions. Therefore, these ultimately lead to increased safety, asset availability, and lower asset management costs. Our solution was created together with multinational oil and gas leader, Shell. Therefore, with our solutions, you can benefit from years of direct industry experience.
Has this sparked your interest?
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