Things to Consider Before You Purchase Software vs. Subscribe

Paying a fixed price for shop management software licenses that are installed on your own computers, with optional support, is one method companies use to deliver their software. Ongoing subscription payments, referred to as Software as a Service, or SaaS when delivered via the web, have gained popularity in recent years. There are a number of pros & cons to consider when making your choice.

Advantages of License Purchasing

•   With installed shop software, you have more control over data, which is the foundation of your business.
•   You don’t have to rely on the Internet to have access to your data.
•   Having your data in-house allows you to know who is accessing your data, what security safeguards are in place, and how well they are working.
•   With vendors who offer split payments & leasing, the start-up cost is much less of a barrier to purchasing, because payment amounts are closer to the cost of subscription payments. With license purchasing, the long-term cost is typically lower because payment is for a fixed term.

Advantages of Subscription or SaaS

•   With subscription or SaaS, you generally have lower initial costs.
•   You have little to no installation or update time when the service is delivered over the Internet.
•   Security for Internet-hosted data is the responsibility of the hosting vendor.
•   When shop management systems providers host the application on their servers, hardware costs may be lower, depending on whether a dedicated server is required by a particular “license purchasing” vendor.

Be an Informed Consumer

As with any purchase, read the fine print. You are responsible for terms and conditions you agree to, whether or not you read them. Note the “renewal” terms of a subscription/SaaS contract and the number of days required for adequate notice to opt out of renewal. (With subscription/SaaS companies, failure to give notice by the end of a year can even automatically obligate you to pay for the next full year.) What is your recourse is if the web-based service goes down? Some companies insert a URL into the contract that links to terms and conditions that are extremely lengthy and filled with legal terms. For your protection, go to the link, print it, and read it before you agree to the terms. 

With the shop management software tools available today, you can have the best of both worlds. By purchasing licenses from a progressive shop management system software company that delivers via the web, you may also get continually automated updates, integrated suppliers & vendors, plus faster support and installation, while retaining the benefits of having your data on-site. The increasing reliability of the Internet means getting the benefits of SaaS with less down-time.

Regardless of the software delivery method, your primary decision factor should still be to find the software that best meets your business needs.


Adam Irby