Software licensing model shift

The traditional model of buying software licences may soon be dead. According to a recent report from management consultancy PricewaterhouseCoopers, the introduction of service-oriented architecture and the growing prevalence of software-as-a-service is set to radically reshape the way businesses pay for software.

The notion of up-front payments for perpetual licences will give way to value-based subscription models across the board, the report’s authors predict. However, these changes are heralding huge uncertainties for the software vendors, as they struggle to find models that can deliver competitively priced software.

But while the vendors will struggle to come to terms with this new paradigm, businesses will benefit enormously, PwC predicts, as they will have far greater ability to align their IT expenditure to the business value that it creates.

The first examples of this change have already been seen in market segments such as operating systems, software developer tools and customer relationship management. But it will eventually have an effect on all software sectors, including enterprise resource planning, the authors note.

Ian Cowley

Ian Cowley is the managing director of printer cartridge company By taking a systematic trial and improvement approach, Cowley and marketing director Sean Blanks have created a Sunday...

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