Perpetual AutoCAD Licenses to End?

Bangalore, India

Is this really the end of democracy? Or a new beginning?

The software licensing landscape is changing! The raging topic today is how your software should be licensed to end-users - new as well as existing ones?

In the days of desktop-only software (the pre-Internet era), the only way software was licensed were with perpetual licenses - usage rights owned forever. When web service providers started delivery over internet, this model would not work. The concept of subscription was born, that allowed pay-for-a-time-period model. At the expiry of the tenure, a renewal and re-payment was required. While this started as a technical necessity of the medium of internet, the other advantage (for vendors) is that it forced users to pay every year for renewal of service. It guaranteed constant income for them. Users gladly paid because the service was unavailable offline.

It is certainly end of innovation for many software.

Over to desktop CAD software - the situation is quite different. Many software have reached a dead end as far as innovation is concerned but they are stable and serve the purpose for some users. These software are not innovating enough to motivate users to open their purse strings every year for a new version.

Take the case of AutoCAD for instance. Autodesk has had to grapple with stagnant or falling revenue and profits for the past 5 years, possibly because of the above reasons. In the most recent conference call with financial analysts, CEO Carl Bass has had admitted that perpetual licenses may just go away in the not-so-distant future. Is this really the end of democarcy as Ralph Grabowski asks? Or is this the start of a trend that will soon be followed by others?

Today, many software  vendors are under severe pressure to follow the subscription model and do away with perpetual licenses. The reason is simple! It is difficult to convince someone to buy the next release of software whose What's New! list consists of only superficial enhancements.

We may perhaps be in the transition era now going from perpetual-only to subscription-only licenses. While every desktop CAD user has not jumped to this bandwagon yet, it is interesting to see how things pan out in future. Autodesk has been the undoubted leader in the CAD industry for a long time. Will others follow the leader?

With the subscription model, for customers, it becomes a classic Buy or Rent decision. If you want to use the software for a longer duration, buying a perpetual license is a cost-effective option. For those who intend to use the software for short term, Software on Rent or Subscription model is a viable option. Abolition of Perpetual licenses takes away the right of the first category users to stay put. Also, the subscription model leaves a hugely unanswered question. What happens to the data created by the user during subscription period? The proponents of Subscription model say that it gives the flexibility to the user to change if he wants to, but leaves the data locked up. So the flexibility argument flies out of the window right away.

For now, it is advantage non-Autodesk camp who are still holding on to their promise of offering perpetual licenses on desktop software. I would buy software that is perpetually licensed to me, with no threat of it stopping after 1 year because I do not want to renew my subscription. I would really hope that vendors stay away from killing perpetual licenses.

The economics is clear. Forced subscription (with an expiry date) wants me to pay the vendor every year even if there are no improvements in the software. Else, my software stops working. It guarantees the vendor income every year, with no guarantees for the user. That is where democracy is killed. A perpetual license guarantees that I get to use what I have with me today, for ever, with all its faults and strengths.

For more views and opinions, here is another thread.

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Comments

[Ralph Grabowski]

My explanation for the blog entry titled, "End of Democracy." Autodesk marketing loves touting that they are "democratizing design." Their definition is limited to "lower prices," and then for only a few, select pieces of software they acquired (and that had been sold at much higher prices pre-acquisition). Core software prices go up, contradicting the claim.

Contrary to the beliefs of Autodesk marketing, democracy is not about lower prices but about choice. By removing reasonable priced upgrades (already done) and removing perpetual licenses (coming up next) from the choices customers can make, Autodesk brings to an end "democracy."

The good news is that Autodesk's actions (which I also see as stemming from panic over future income) gives the AutoCAD workalike industry a better chance at sales. Knowing this, Autodesk has perhaps fired its first volley in a war to make smaller, perpetual license-offering competitors unpalatable to customers -- by suing ZWSoft. (So far, the law suit is going badly for Autodesk, and so I trust this will be the last such signal to the market.)

[Roman Ocheretko]

Since 2008 Nanosoft has offered innovative development methods and subscription (rent) software distribution model.
But we also provide classic perpetual licenses distribution.
Many of Russian CAD users more often purchase perpetual licenses.