There are few things more frustrating than having to pay a bunch of money for something that you don’t really need and will probably never use. Unfortunately, for most small business owners or sole proprietors, that is what a lot of business software tends to be.
For instance: you know that you shouldn’t be doing your company’s books on a simple Excel spreadsheet you made yourself; your company is too big for that now. At the same time you don’t need all of the bells and whistles that the major financial software companies insist on packaging with their programs (all of which help elevate the price).
Typically, most entrepreneurs breathe a heavy sigh and go ahead and buy that software anyway. Maybe they’ll wind up needing all of those bells and whistles in the future. Maybe they won’t mind having to pay for expensive upgrades that fix a single bug at a time (ensuring massive profit for the company while potentially causing money problems for yours). This is because, until recently, that was the only option.
Today, though, you can buy subscription based software. What’s that? Subscription based software is software that you don’t actually own but that you pay to use on an as-needed basis. It’s often abbreviated SaaS for “software as a service”.
This got a lot of press earlier this year when Adobe announced that it was stepping away from the standard “here pay for this big thing” model and switching over to a monthly subscription fee. The hope was to pick up business from people using open source alternatives like Pixlr because customers couldn’t afford the hefty one-time payment for the primary software package.
Now, other types of software companies are getting in on the act. Next Process, which now offers SaaS for business process management, had the same basic idea that Adobe had—create a subscription based software service. But they took it a step further. The company also offers assistance with the processes themselves. For instance, a business owner who opts for their Accounts Payable solution can outsource the bulk of their invoicing and collections duties to Next Process and pay only for exactly how much work the system does (after the setup/installation fee).
Imagine being able to outsource the chasing down of client payments (to a certain extent)!
Subscription based software isn’t just for tech companies either. It’s a big hit in the entertainment industry as well. Just look at streaming media companies like Netflix and Hulu Plus. A better example, are gaming companies. The MMPORPG (Massively Multi-Player Online Role Playing Game) industry is doing better than it ever has before. These are large complex games that charge a monthly fee for players to continue playing.
So, should you switch?
Before you make the leap and switch over all of your software to pay-as-you-go and subscription based services, ask yourself the following questions:
1. Is there a subscription based service for what I need?
2. Is that service truly secure or could a twelve year old with too much free time hack in?
3. Can I afford the subscription fee/payment plan?
The answers to those questions will help illustrate what path you should take.
Article contributed by Jenna Smith
