Perpetual software licenses: Are they worth it?

In the last decade, software has undergone significant changes — not just in its capabilities, but also in how it’s delivered and maintained. Licensing has also changed tremendously, offering you options for aligning with your goals and operational strategies.

For big software purchases, your company likely faces a choice between a subscription-based (SaaS) model, which requires ongoing payments and often comes with regular updates and improvements, and perpetual licensing, which enables you to use the software indefinitely. Both models offer distinct advantages, but it’s important to understand the broad potential impact on your business if you commit to a perpetual license.

While they may initially seem more cost-effective, the long-term implications tell a different story. They can’t live up to their promise of unlimited future usage. SaaS offers the true perpetual value. 

Cost considerations

It’s easy to assume that perpetual licenses save money in the long run. After all, a one-time payment seems more economical than recurring subscription fees. However, this perspective overlooks the long-term costs.

When you buy a perpetual license, you’re purchasing a version of the software that will not evolve with your organization’s needs. As your company grows and changes, you’re locked into technology that hasn’t grown alongside it — and a provider you may not be happy with. This creates “tech debt” that’s difficult to overcome and will likely necessitate another significant investment within a short period of time. Moreover, your IT team may face the added burden of maintaining or integrating outdated software with newer technologies, which can generate more hidden costs.

SaaS solutions, on the other hand, offer ongoing value. With regular updates and enhancements, they evolve with your business and ensure you always have access to the latest features and capabilities. Adaptability extends the lifespan of your software, helping you stay competitive without needing to overhaul your entire tech stack.

Security implications

Cyber threats are constantly evolving, so it’s best to choose software providers that can help you maintain strong security measures. A SaaS model gives you access to regular security updates and new features that can protect your business. A proactive approach reduces the risk of data breaches and system intrusions that can lead to significant financial and reputational damage.

Perpetual licenses can create risk because there’s less of an incentive for providers to invest in ongoing security improvements. And without consistent updates, your software could become vulnerable and leave your data and operations exposed. Even if you invest in additional security measures, the lack of integrated updates from the provider can leave gaps in your defenses.

The flexibility factor

As your business needs change, a SaaS model will allow you to scale your software usage. You can add new features, users or integrations without a significant upfront investment. Especially if you’re in an industry that experiences rapid fluctuations, this is a major upside: You can quickly adapt to market changes, customer demands or new regulatory requirements without a software overhaul.

SaaS models also typically include seamless updates that occur in the background, so you experience fewer disruptions.

Upgrading to a newer version of perpetual software may require a separate purchase, and integrating new capabilities can be both time-consuming and costly. Ultimately, this rigidity can hinder your ability to innovate and stay competitive.

Long-term viability

The longevity of software code is a crucial factor when you’re choosing between perpetual and subscription licenses. While the idea of a perpetual license suggests indefinite use, the reality is that code typically becomes outdated within three to five years if it’s not continually updated. With innovation happening faster than ever and software becoming more complex, even the most robust solutions will eventually become obsolete.

A subscription gives you the best chance of extending the value of your investment because you have access to updates as your needs or industry standards change.

Resist the myths and go with SaaS

Outdated software, security vulnerabilities and limited flexibility are significant drawbacks that outweigh the initial savings of a perpetual license. Succeeding in business today requires finding solutions that evolve in tandem with your business goals.

If you want to make sure your software not only cuts short-term costs but also drives long-term growth, security and agility, choose a SaaS model.

Powerful automation fabric solutions offered as SaaS, like RunMyJobs by Redwood and JSCAPE by Redwood, give you peace of mind that your investments will drive value for years to come. Learn about this power combo of workload automation and seamlessly integrated managed file transfer in a demo.