Jason Fried (37Signals) recently published an open challenge to the software subscription model—their stance is that customers should once again be able to buy and own software products. To pay for them once and own the source code.
We discuss both models' pros and cons and speculate why Jason and the 37Signals teams introduced this strategy and manifesto. Here are some of our key takeaways:
- In the last few years, many software companies were able to get away with neglecting the second “s” in SaaS (service). But given the state of the tech industry, that’s now sometimes a determinant factor in whether or not someone continues using a product. We talk more about this in episode 44.
- Whether you sell software in a subscription model or through one-time version purchases or pay-per-update, there will almost always be a need for product innovation and support—to help customers succeed with the product and to maintain compatibility with hardware and browser changes. That can be paid for in service subscription fees (hence, the term, SaaS), or in other ways: for example, you could buy and own a software product, but the tradeoff is that you may need to coordinate and pay for server space, technical expertise to maintain it, and you’re stuck with a single version. The software world has trended toward the first model the last 10 years, but now people are starting to challenge this concept. For many products that aren’t consistently improving (or, in some cases, becoming bloated or harder to use)—customers often wonder, “What am I paying a continuous subscription for?”
- Supporting a pay-once model is an interesting positioning and differentiation play—and could be one of the underlying components of 37Signals’ strategy. For customers who’ve ever felt burned by the traditional SaaS model, a product that supports a pay-once philosophy could help you stand out from the competition.
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