4 ms·
For years I've been saying the era of every company thinking they can get $20 per month from everyone has to come to an end in some form. There's a real limit
by robomartin 4y ago
For years I've been saying the era of every company thinking they can get $20 per month from everyone has to come to an end in some form. There's a real limit to how many $20/month payments people can or are willing to make. At some point budgetary limits come into play. There's also payment exhaustion (where you start feeling like you are bleeding money every month and ask yourself "Is it really worth it?".
This isn't true just for streaming services. Software is another good example. MS Office, CAD and EDA tools, online tools/SaaS, email, etc.
My simple example is what used to be called the Adobe Creative Suite. We used to buy full suites for everyone who needed it in the company and update them with every release. That worked well until CS6, the last time we sent money to Adobe. The subscription-only approach put an end to that. While we still use CS6 (we own a bunch of licenses), this has caused us to look into alternatives. One remarkable example of this is GIMP. It's a fantastic tool. It has as much, if not more, depth as Photoshop. It does everything we need to do and more (Python scripting is incredibly useful). And so, by pushing subscriptions, Adobe pretty much lost a loyal customer forever.
The business equation is, at the core, simple. You have inputs and outputs. If you want to remain viable and grow you have to increase one and decrease the other. Subscriptions force you to bleed money every month just to be able to keep working. In many cases you don't have the option to take a break. Imagine 2020, 2021 pandemic timeline when, for lots of companies, the music stopped (the inputs).
There are companies like JetBrains who get it. If you take a break you are entitled to use the product without updates (I think it reverts to the last full years' version. That's acceptable. If I remember correctly, with products like Office 360 and Fusion 360, you stop paying and you are done until you send more money. That simply isn't acceptable. I think of files and projects I have dating back to early 1980's AutoCAD and other tools.
Another example is Altium Designer. Altium has been trying really hard to shove people into a cloud-based paradigm. They spent a tremendous amount of time and money adding a whole cloud layer to their product. The strategy was to try to sell the company. AutoDesk almost bought them. The problem, in my opinion, was that they devoted so much time and effort to the cloud paradigm that they caused serious damage to the product. Every time they touched it they introduced ten new bugs. It got to the point where you almost could not trust the product. We certainly got there. After over twenty years of supporting this company with multiple licenses and annual maintenance payments, we decided to pull the plug. Last year we begun a transition to KiCAD and could not be happier. We are also happy to support the effort financially by sending a portion of what was our annual maintenance fees to the KiCAD foundation. This is very similar to what happened with Photoshop and GIMP.
That said, I do understand companies liking the subscription model. You get to shift into a consistent revenue stream and can focus on upgrading software over time. I get it. The issues is that I just don't think this is the best model for the customer. If you are going to constantly demand money there need to be non-trivial benefits to someone spending that money. Objectively speaking, there are no major benefits between Excel 2016 and whatever you get with an Office 360 subscription. Sure, a few things here and there and some collaboration benefits. Guess what, the world ran just fine before all of that.