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How the Cloud Changes Software Licensing

By Mae Kowalke, TMCnet Contributor

When Apple (News - Alert) stopped development of its pro photo management application, Aperture, it gave me pause. Not because I needed to switch software and move to its competitor, Adobe (News - Alert) Lightroom, but because the change also effectively forced me into a cloud-based subscription model. Adobe Lightroom is available both as a standalone and a cloud-based product, but there is widespread speculation that it will go the way of other Adobe products and soon only be available in the cloud.

I use such software enough to make a one-off purchase, but not enough to pay for an ongoing subscription.

Many businesses are in the same situation: The cloud subscription model brings benefits, but not enough to offset the monthly cost over the course of a year or two.

Some have predicted that the cloud model will make ELAs obsolete, because it saves businesses from maintenance fees and unexpected costs from enterprise license agreements. I’m not so bullish, however.

The cloud model does have its advantages. Businesses know exactly what they are paying, they only need to purchase software that actually is used by employees, there’s a lower up-front cost, and maintenance is recognizably easier.  This is the sales proposition for the cloud delivery model.

But are businesses really saving money? Not always.

Software vendors are not necessarily saving businesses money by eliminating maintenance fees and offering their software in smaller, bite-sized commitments. They just are baking this ongoing maintenance and licensing fees into their subscription model.

Do the math, and in most cases the cloud model costs more over the course of several years.

Sometimes it still makes sense to use cloud software; when buying new software or needing solutions for a limited time, the cloud model rocks because its ELA is so much easier and cheaper. If teams are scaling up and down with their use, the cloud is the way to go.

The cloud subscription model also makes sense for businesses when immediate upgrades are advisable—such as with designers using Adobe Photoshop.

Are immediate upgrades essential for Microsoft (News - Alert) Office, however? Maybe not; I’m still happily writing with Office 2004 on my Mac, and for a lot less money than I would have paid if running Microsoft’s Office 360 cloud offering.

The reality is that the cloud is changing the ELA game, but it isn’t always eliminating it. Nor should it. Now there are more options, but only having cloud options is not always in the best interest of the consumer.

Right now I’m looking for an alternative to Adobe Lightroom. A cloud model for that application is not the right call; I’ll be much better served with an on-premises license that lets me use the same software for several years without having to invest more than my initial purchase cost.