The software industry is going through a paradigm shift in the delivery of software services to customers. Software has traditionally been seen very much as a product however in reality software is not a product at all; when you “buy” software you do not own a physical product.

At Adaptev we have long since recognised a need for a change in the way software is perceived, priced and delivered. Software is more akin to a service than a product; it needs to evolve, grow and be delivered on demand. Businesses now demand more of their enterprise software than ever before and see it as a key driving force behind their business. A “product” that stands still is no longer an advantage. Now the entire software industry and the business community is waking up to seeing software as a service that is provided and priced as a demand based or subscription based service.

At Adaptev we see our future in delivering our enterprise software as a subscription based service. Our pricing model provides a “win-win” approach. Here are some of the benefits of this approach to our clients versus the traditional method of purchasing software licenses.

Licenses A general myth about paying large amounts of money for software up front is that it belongs to you – it is bought and paid for. This is not the case – software is never yours, it will never belong to you. You have purchased the relevant number of licenses to use the software generally on a time unlimited basis. You will not receive any updates or upgrades in with that price – when it is superseded or technology renders it redundant that large investment you made initially is of no use. Software licenses can be recorded as an asset however they are an asset that will depreciate fast especially with the speed of change in software technology; your original investment in licenses will be worthless in 3 to 5 years. By subscribing to a service rather than “buying” a product you are not making a large, up-front investment for something that you will never own anyway.

Maintenance Most enterprise software companies will tie you into a obligatory maintenance & support contract which will deliver the updates to the software product you paid for originally. For this you will pay between 10% and 20% of the original purchase price per annum effectively enforcing you to pay a subscription as well as the cost of “buying” the software. This annual fee is payable for as long as you use their software. With such a large up-front investment you will certainly expect to be using it for 5-10 years. The software supplier is effectively getting the best of both worlds. With our subscription based pricing model software updates are an inherent part of the service you are subscribing to and paying for and support charges are built into the price of the monthly subscription.

Risk When you are looking to “buy” an enterprise software solution to drive your business forward a key element (if not the key element) in your decision making is how confident you feel about the company you are dealing with. Fantastic software is no use if the company delivering it is not there in 6 months or their support is sub-standard. Making a large up-front investment for software contains inherent risks which you are being asked to entirely assume. By not asking you to pay a large up-front charge for our software we are instead assuming that risk. This gives clients absolute confidence no matter what the future brings.

Service When you have implemented your enterprise software and have made a large up-front investment you are entirely at the mercy of your software supplier to be as good as their word in providing a level of support that your business needs. Even if that support is not what you expect you will still be tied in to the annual maintenance fee. To ensure complete satisfaction we shall draw up a Service Level Agreement promising the level of service we will deliver. For whatever reason, if we fall below the agreed upon level of service at any time we shall waive the subscription fee for that month. We will publish and issue you with reports of support delivered to ensure you are aware of how well we are meeting our goals.

ROI ROI (Return On Investment) is a buzz phrase around enterprise software company’s marketing campaigns. With subscription based software this becomes a non-issue because there is no large up-front investment that you need a return on in 2, 3, 4 years etc. The return you get on a reasonably priced monthly subscription is easily quantifiable and can be identified and appreciated for the lifetime of the subscription.

Value By providing our software as a subscription based service our focus shifts from providing a one-off product and supporting that product to delivering on-going value. Our focus on value ensures we are constantly improving and enhancing our software and delivering that increased value to our clients consistantly - not in one-off, irregular product upgrades. By dealing directly with our clients we are engaged in a constant dialogue to ensure that the service we deliver is providing constantly evolving business value and advantage to your business.

The biggest objection to subscription based software delivery is that you will be paying for it indefinitely. However with subscription based software the perception of software delivery changes from being a product that you buy and then get updated and supported to being a service – a subscription based service more akin to your broadband internet connection than buying a product – you pay monthly for delivery of the service; updates and support are built into that monthly fee and we guarantee on-going delivery of the service for the term of the subscription. As an ongoing service we do not charge up front license fees.

As highlighted earlier with purchasing software licensing upfront you are tied in to on-going maintenance and support fees which will need to be paid if you are to receive up-to-date versions and support. These fees can be as much as 20% annually of the original license costs. You will be paying indefinitely for software you license up-front as well – there is no such thing as “pay-only-once” enterprise software.

We benefit because we are ensuring revenues for our software on an on-going basis This enables to us to plan better and to ensure the right resources are allocated into vital areas for on-going success such as R&D and support services. This in itself is an advantage to clients; it proves we are in this for the long term. Using this approach we cannot take a large up-front fee for the software and run, our future success relies on delivering on-going value and a long-term commitment to our clients. As mentioned earlier the subscription services method of software delivery is a "win-win" business agreement.

As our software is targeted at small & medium sized businesses (SMBs) this pricing structure offers our clients the opportunity to implement world-class enterprise software into their business without a large upfront capital investment that is often prohibitive to getting the systems SMBs need to compete with larger companies.

We offer 2, 3, 4 and 5 year subcriptions for our software services giving you ultimate flexibility. The only upfront costs involved are for installation, training and configuration.

The perception of software as a service is becoming recognised as the future of software delivery especially with the advent of internet technologies such as web services. Changing client perception is a big effort that is holding many software companies back from making it the core method of delivering their software. We have no such trepidations confident that our clients are forward thinking and progressive and see the huge benefits of implementing enterprise software services.