Over the last decade professional software has seen a dramatic change in the way it is sold. There are two new Software as a Service (SaaS) business models growing quickly: cloud and lease. Surveys have estimated that around a third of the total enterprise software market is now covered by these new licensing models. CAD software seems to be one area slow to adopt this trend, but some significant changes have already happened.
With the cloud model the software and data are on servers the user never sees or even thinks about much. Companies pay for use for a specified time-period and usually access the software via a web browser on a per-user basis. If the customer does not continue to pay, access expires. One of the top companies leading the adoption of this business model has been Salesforce.com. This change has reduced expenses for customers through effects such as reducing the burden on IT departments for installing and updating critical programs on the PCs of sales, marketing, and operations staff. This shift makes a lot of sense due to the nature of the shared customer/prospect database needing to be a single location anyway.
In the design world only a few new programs have been built from the ground up as cloud-based CAD – Autodesk’s Fusion 360 and PTC’s Onshape. Some established programs have added options to run on the cloud and there are beta versions as well as rumors about other new cloud CAD launches coming. Overall the adoption of cloud platforms for CAD seems to be slower than in the rest of the enterprise software market.
So far, the impact of the lease side of the SaaS trend in the CAD world has been much larger than the cloud. Lease means traditional, PC-based, locally installable, file authoring software like CAD/CAM is sold on a temporary-basis like cloud software uses. Adobe (Photoshop, Illustrator, Acrobat) and Autodesk (AutoCAD, Inventor, 3DS Max) are prime examples. Both large companies stopped selling permanent licenses of their products a few years ago. More recently PTC made this same switch. This means that paying an annual rental fee is the only way to use the latest versions and support is ending for any versions for which customers own a permanent right to use. Other large CAD vendors like Dassault (CATIA, SolidWorks) still sell permanent licenses and also offer software leasing (which they sometimes call term pricing).
It’s understandable that people might be uncomfortable with not owning a permanent right to use the software which they use to create and store some of their most valuable intellectual property. For this reason, Kubotek has no plans to stop selling permanent licenses for CAD. Like Dassault, we have setup the option for customers who prefer to lease software to do so.
For CAD utility programs like multi-CAD viewing and comparison software which need constant translator updates and don’t have the IP issue leasing makes more sense. On our Kubotek3D web site we are quoting the lease price of these types of products first and offering permanent licenses as a backup for customers that prefer to own.
Note that I have not used the terms subscription and perpetual in this article. Kubotek3D is intentionally avoiding both terms and it is worth mentioning the reasons. Autodesk, like most large software companies, uses the term subscription to mean lease. SolidWorks uses the term subscription to mean annual maintenance (support and updates) on permanent licenses. With this terminology conflict between two major vendors in our space we have chosen to use plain English: lease. Similarly, the term perpetual in the software industry means a license the customer permanently owns outright with no lease. Outside of the software world the term Perpetual Lease means the right of the lessor to renew as many times as they want. It is also accurate to say that with leased software to keep using the software the customer pays perpetually. To us the term permanent license is clearer, and also plain English.