[Channelnomics] Software vendors to scrap perpetual licensing next year, predicts IDC

Those attempting to offer a mix of perpetual and subscription-based models warned they may end up in ‘no-man’s land’

At least three software vendors will move to scrap all perpetual licensing in 2016 as they struggle to square it with their burgeoning subscription-based businesses.

That was one of 10 predictions made by market watcher IDC as it set out its vision of how the software licensing and pricing market will evolve in 2016.

Writing in a Pulse Post on Linkedin to promote the research, IDC research vice president Amy Konary predicted that software subscription revenues will grow by 21 per cent next year to $130bn.

The main benefit to IT buyers of moving from a perpetual licensing to a subscription model is the ability to purchase software more efficiently by aligning costs with experience or use, Konary said.

“In addition, subscription models are typically more transparent and less complex than perpetual counterparts, and offer customers the ability to pay for software via an operating budget,” she said.

On a related note, Konary predicted that at least three software providers will announce in 2016 the intent to end all perpetual licensing.

Some vendors that try to support both a perpetual and subscription-based model will “find themselves in a no-man’s land of trying to sell two different things and not having a real significant focus on either one”, she explained.

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