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How can you own an online service?
by chrisseaton 4y ago
How can you own an online service?
- withinboredom 4y agoYou own a license, instead of paying for a license in perpetuity.
- shapefrog 4y agoAnd how frequently would said license be renewed? How about for maximum flexability we do a per user rolling monthly license.
- withinboredom 4y agoSurprisingly, people figured this out a long time ago. When you create something substantially different from what the customer originally paid for, you sell it as something different.
- dotancohen 4y agoIt's actually a fair question. The online service still has hosting and bandwidth to pay for at a minimum. Paying them once does not mean that they will be able to pay for hosting and bandwidth for the next twenty years that I expect to use the product. For scale, I've been using VIM for almost thirty years. Twenty years is not an exaggerated number.
- withinboredom 4y ago4.5 people per second turn 18 years old. Surely you can convince at least one of those people to make a purchase every month?
- dotancohen 4y agoOne $10 - $50 sale per month won't pay for hosting and bandwidth. Not to mention developers' salaries, rent, insurance, electricity, equipment, and a few pence into my childrens' funds.
- drdec 4y agoGraveyards manage to do this, i.e. sell once and provide maintenance for a long period afterwards. It might make the software prohibitively expensive though.
- chrisseaton 4y agoWhen the software requires continuous updates and a server component and storage and things, this doesn't make any sense.
- withinboredom 4y agoThere’s a ceiling, a point you can never pass, with a subscription model due to churn. There isn’t a ceiling with one-off purchases.
- paulryanrogers 4y agoIsn't the one-off ceiling much the same: everyone who is interested has bought it, of at least tried it?
- withinboredom 4y agoNope. The one-off ceiling is basically non-existent for practical purposes. Do I pay you a theoretical infinite amount of money to use your product for a small percentage of my income, or do I pay you a small part of my wealth for your product? With a subscription model, there’s a point where the consumer has paid you “too much” and they will either cancel or find another solution. This is also known as churn. If your avg customer pays you for 8 months, this is a pretty good indicator of how much customers are willing to pay, but you can likely charge more for a one-off cost, sometimes 2-5x more. Since you are likely combatting churn by finding new customers, switching to a one-off model means you can just find new customers and not worry about churn since it doesn’t exist. Don’t get me wrong, sometimes subscription models make a lot of sense. Most of the time they don’t unless you’re selling something that has an infinite cost anyway (like immediate access to “all” movies ever made like Netflix) and would be an infinite cost for the consumer to do it in some other way. But if I can pay a contractor to build your app for less than infinite money, then it shouldn’t cost an infinite amount to use your product.
- tomnipotent 4y agoSubscription's exchange a higher ceiling for a higher floor, which makes running a business much easier.
- Brian_K_White 4y agoSelf hosting option.