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The other reason is how it looks to business customers. Buying a piece of software (one-off) almost always requires budgeting and capital-expenditure approval.
by philpem 7y ago
The other reason is how it looks to business customers.
Buying a piece of software (one-off) almost always requires budgeting and capital-expenditure approval. Add in the mess of depreciation calculations and maintenance fees, and it's just a mess. Can be weeks of work just to buy £200 worth of software.
A subscription service usually gets budgeted and booked as recurring expenditure, and looks better on the balance sheet.
- your-nanny 7y agoTaxes might be different too. our municipality taxes my wife's biz as a percent of biz capital (US)
- webmaven 7y agoIn some environments (esp. the public sector) recurring (AKA "operational") expenditures are a lot harder to justify than capital expenditures. An OpEx increase requires an increase in budget paid for by taxes, while CapEx can be covered by a one-time bond. This leads to paying vendors millions for a software+support contract rather than hiring a few engineers.