Software licence: perpetual or annual

One of our point of sale software competitors has released an offer whereby their users purchase a one year licence for their software. The software is apparently coded to lock if the licence is not renewed.

While it’s up to the company to put whatever offer they feel serves the marketplace, it’s critical that the marketplace is fully informed as to the difference between an annual renewable licence and a perpetual licence without annual fee strings.

It concerns me because of the data which builds up in these Point of Sale systems and that this business specific data may be locked away at the expiry of the licence. Further, there does not seem to be an up-front commitment on what the annual licence fee will be. Once you;re relying on this system and it has your data you’ll probably be prepared to pay more than you should.

We’re not talking about this development in our sales pitch but we feel we will need to. Yesterday we had a situation where our package deal price was $2,000 more expensive that this competitor. The only difference was that our system is sold with a perpetual licence and the competitor system has a one year licence. We found ourselves having to explain the difference to first time computer users who wanted to be running their business and not listening to the explanation. If they go with the competitor, the time they will want this information is in a year.

Software, service and support issues aside, this new pricing model has the potential to confuse the small business marketplace and leave messy situations for someone else to clean up.

We’re not heading down this path and if we ever did it would be with very clear paperwork so that the confusion we found yesterday could not arise.

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