Home Outright Sale The Move to Subscription Based Software Pricing

The Move to Subscription Based Software Pricing

by Kerry Dawson

Over the last few years, changes have been occurring in the software sales market that has brought on different solutions to raising or maintaining income. At one point, a developer brought out a product, you bought it and generally at a major upgrade you purchased the software again but this time for a discount. You weren’t forced to upgrade. However, if you wanted the latest and greatest from the developer, you bought the upgrade.

Software, when it first comes out and for the first iterations in its life cycle, tends to generate money for the developer. As the software matures though, the need to upgrade lessens. Further, the developer has more difficulty providing enough value to call it say a version 2.0 to 3.0.

The Need for Income

However, this gets at the root of a software developers problem. To continue to fund research and work to enhance the product, the developer needs money to maintain staff, infrastructure etc. Soon though somewhat of a Catch 22 ensues. It becomes increasingly difficult to keep funds flowing.

However, the requirement for income hasn’t changed. People still need to put food on the table etc. Some software developers do very well in the beginning though and make a substantial amount of money thus funding future growth.


With the course of time, the freemium model made its way onto the scene. To comepete, software developers were being forced to give away their software. If this were to continue, there would be no incentive to build anything let alone enhance it.

Thus, the freemium market soon saw that to get rid of ads and to have full functionality such as sync, users had to pay for what became known as the pro version. This tended to work as those that had the money certainly bought the pro version and those who were very tight stuck with the freemium system till they could afford more.

However, this model was again delimiting in the amount of ad on services that were available for sale. Thus, what we are seeing now is the subscription based model into environs it makes no sense. Certain pieces of software and their functions made sense on a subscription model. However, most software remains most viable as a purchase once then upgrade should you like the software.

The very serious problem with the subscription based model is that it can quickly become unduly expensive if too many players market their product this way. $10 here and $20 there is not much if its a one off deal. However, if you have ten pieces of software on a subscription based model it can quickly become overly burdensome.

There is only the odd package that provides true value this way as a component of the solution does naturally fall under a subscription model. Office 365 is the best example of this. Instead of buying the software, every year you’re entitled to all the latest and greatest upgrades. However, the Office 365 also provides you with services, such as cloud storage and exchange, which naturally fall under a subscription based model as part of the solution. At the end of the day, Office 365 is a truly value add proposition.

Subscriptions that make No Sense or are Needlessly Expensive

Office 365 is a good value add example. However, some cloud services that are purely cloud services are very expensive. Dropbox is quite pricy for what you get along with Box and a number of others.

Then there are those that were subscription based that jack up their prices where one has to question how affordable the solution is. Evernote is an excellent example of this. Last year, Evernote released a huge backlash when it raised its prices to almost double what they had been. Evernote is popular with students and it is exactly this demographic that has to watch their dollars. In the case of Evernote, software solutions that were/are excellent that fell out of the spotlight when Evernote came a rapping suddenly fell back into the limelight as viable, much more affordable alternatives and in some cases more powerful alternatives. DEVONthink Office Pro is a good example of this. Between the purchasing of the software and an upgrade you tend to go a long time before you have to fork out any more money. Further, some feel DEVONthink, as long as you don’t need full cross platform capability (e.g. Android, IOS, Mac etc) is a far more powerful solution than Evernote. Both products are information managers but really only DEVONthink can also be thought of as a knowledge manager.

Finally, you have software solutions that were either solely outright sell solutions that convert to a subscription model or some new products that start out from the get go as a subscription based services. It doesn’t take long though to recognize that these products are not subscription oriented at all and fortunately the market being what it is, offers alternatives so that you don’t need to get locked into that which makes no sense.

Subscriptions that Clearly Make No Sense

There are more and more of these products that are taking this approach with the rightful consumer backlash. I mentioned Evernote. One that really upset people in the last year was when Smile Software attempted to pawn of TextExpander as a subscription based solution.

Fortunately for the consumer, they can either just hold at Text Expander 5, a more than adept text Expander or choose from amongst the competition such as Typinator, TypeitforMe or some of the power packages that include text expansion.

In the case of a product like Todoist, that has a loyal following and is a good product, they use subtle and not so subtle techniques to get you on a subscription. Fortunately, there is a ton of choice in this market with a lot of good products. As an example, both 2do and Todoist are highly regarded in this category. My view is though, you are far better served by 2do as there is no lock in and little chance that your data will get orphaned if you can’t afford the subscription. With 2do, you buy your product and whether you upgrade or not you’re product will continue working.

Even at the very high end of this market, that being OmniFocus, The Hit List and some lighter hitting GTD programs like Chaos Control, you can buy the program that suits your budget and your needs. With any of the above three products I mentioned, depending on whether or not you need to be cross platform (Chaos Control is fully Cross Platform) you can’t go wrong with any of the products. It’s simply a matter of finding one that suits your taste best. However, control wrests with you, your budget and the freedom you desire.

All is Not Lost for the Outright Sale Proponent

The market has changed there is little doubt. At times, it may seem more difficult than at others to make a good stream of income. However, this isn’t a static world. Even if a person has a good task manager, it might not be suitable either for the person (in the beginning, they thought it great) or they need a slightly different kind of tool.

Your product can continue to sell in a saturated market. If it brings value to the table, people maybe inclined for a certain kind of product to shift gears. Omnifocus might have been ideal under the rigours of one project but in a completely different project (cross platform as an example) a different solution might have to be drawn on.

The subscription model might hold an appeal when the income flow seems to be drying up, however, consumer backlash might cause the income flow to completely dry up. If I now had to choose between say DEVONthink and Evernote, considering my systems makeup, there is no question I am going to go with DEVONthink or possibly even Together (you do have options). I won’t be held ransome to any company that might like to take me down that road.

There are options and it is just a matter of sitting down and carefully measuring all the parameters. As I said very early on, one subscription model won’t kill you. Ten might just do it. Go with what works for you knowing that everything will work out just fine in the end for all concerned provided you are dealing with good products.

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