Perpetual Licenses (also known as on-premises license or self-hosted license) are how most software has been acquired until now. There is an initial cost to purchase a license, plus an annual Subscription cost that entitles the owner to all updates and technical support. For example, a Perpetual License of PHPKB Enterprise (MySQL) edition with 1 Admin user as of July 2021 will cost you $515 plus $135 per year support & maintenance subscription i.e. $650 in total.
Cloud Subscriptions can be thought of as "renting" a software license month-to-month or year-to-year. This type of license is also referred to as SaaS (software-as-a-service) model. With a cloud subscription, you pay either a monthly or annual price that includes software, server hosting, all updates and technical support. A cloud subscription of PHPKB Enterprise (MySQL) edition with 1 Admin user as of July 2021 is $49.95 per month OR $528.95 per year.
Difference between Cloud vs On-Premises Software License
The biggest difference between these two systems is how they are deployed.
- Cloud-based software is hosted on the vendor's servers and accessed through a Web browser.
- On-premise software is installed locally, on a company's own computers and servers.
Advantages & Disadvantages
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The main advantage of a Perpetual License is that it costs less over time. Also, if you fail to renew your "Support & Maintenance Subscription", the software will continue to work. However, there is a disadvantage if subscription is not maintained. You will not receive any new software updates and if you plan to upgrade to a later release, you will need to purchase it as an upgrade license.
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An advantage of Cloud Subscription is its lower initial acquisition cost ($65.95/month for Cloud vs. $800 for a Perpetual License). However, it does cost more over time and if you fail to renew Cloud Subscription, the service will be suspended and the software will stop working all together (whereas a Perpetual License will keep working).
Which license type shall we opt for?
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Our experience is that start-ups and smaller companies (who place a premium on conserving money to maintain strong cash flows) opt for a cloud subscription. It is a great way to get started.
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Most medium-and-larger companies, who cannot be sure their purchasing department will renew subscription every year, tend to go with an on-premise perpetual license. This ensures their software is never inaccessible, however can carry a risk if not maintained (Note: You can renew the support & maintenance subscription after expiry within 30 days).
- Which license type is best? The decision is entirely up to you. There is no difference in the functionality of the software for the two licensing methods or the support you get from us.
Summary
Cloud Subscriptions have a lower initial price but cost more over time and stop working if you do not renew. Perpetual Licenses cost more up-front, less over time, and never expire. Once you have decided which license type you want to purchase, you can place your order on our SSL secure order form.
