"The perpetual licensing model, where you would pay a one time fee for the software and own that version forever, has been rapidly declining. The dominant model today is where the customer pays a recurring fee. This could be per user or per tier for a given term."
"They also recognise that they can pay, see value and then continue to invest incrementally in software,"
"Think of the cell phone type plans popularised by the hyperscale cloud providers,"
"The idea here is that you pay for the actual results or business impact that the software creates and not just for the access."
Software licensing evolved from perpetual one-time fees to recurring subscription models billed per user or per tier. Subscriptions provide predictable vendor revenue and allow buyers to treat software as operational expenditure, reducing shelfware and lock-in while enabling incremental investment. Consumption-based licensing using purchased credits has grown, drawing comparisons to cellular-style plans from hyperscale cloud providers. Outcome- or value-based pricing is emerging, tying payment to measurable business results rather than mere access. The overall trend aligns software cost structures more closely with actual usage and realised business value.
#software-licensing #subscription-models #usage-based-pricing #value-based-pricing #cloud-consumption
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