Subscription vs Perpetual Software Licensing
With a perpetual license the customer pays once and can use the version they bought for as long as they like. Updates are often sold separately as maintenance. With a subscription the customer pays per month or per year, and the software stops working when they stop paying. Perpetual licensing brings in one big payment up front; subscriptions bring smaller payments that keep coming, and your application has to keep an eye on the expiry date.
How they differ
| Perpetual | Subscription | |
|---|---|---|
| Payment | Once | Every period |
| When use ends | Never, for the version bought | When the paid period (plus any grace period) runs out |
| What your app checks | Is there a license? | Is the period still running, and until when? |
| Renewals | Optional, for maintenance or upgrades | Needed to keep using the product |
| Offline tolerance | High, since nothing changes after the purchase | Needs a fresh result before the expiry date |
| Good fit for | Tools people use for years without updates; regulated or isolated environments | Software with regular updates, cloud services, SaaS |
Perpetual licenses in NetLicensing
Use the Try & Buy model. Its FEATURE license template holds the purchase price. Once a customer has that license, validation returns valid=true and evaluation=false, with no end date. If you don’t want a trial, set the evaluation period to the minimum of one day, as described under Standard / Perpetual in Licensing Models.
Subscriptions in NetLicensing
Use the Subscription model. You create one TIMEVOLUME license template per period and price, say 30, 90 and 365 days. If you mark a template with price 0 as automatic, every new customer gets a free period that starts with their first validation.
When a customer buys a new period before the current one ends, it’s added after the current expiry date, so nobody loses days by renewing early. Validation returns valid and expires, the end date of all purchased periods together. Switch on the grace period in the product module if you want customers to keep working for a little while after expiry while they sort out the renewal.
Customers renew in NetLicensing Shop, and recurring payments work with the payment providers that support them, see PayPal. If your pricing is a set of plans with different features, Pricing Table is the better fit.
Mixing the two
A common setup is a perpetual license plus a maintenance subscription. One Try & Buy module grants the right to use the product, and a Subscription module covers updates or support. Your application then compares the subscription’s expires date with the release date of the installed version.
Other mixes work just as well: a subscription with paid add-ons is Subscription plus Multi-Feature, and term licenses for individual devices are a job for Rental.
Moving customers from perpetual to subscription
Add a Subscription module to the product. Existing perpetual licenses keep working in their own module, so nobody loses anything. Then decide in your application which features need an active subscription. Warning levels and notifications help you follow up with customers whose subscription is about to end.
Related
- Software Licensing Models Compared
- License Lifecycle: Activation, Expiry, Renewal and Revocation
- FAQ: How do customers renew an expired subscription?