Why does it feel like everything is moving to a subscription? Think of your music collection, television via streaming services, and watching a movie, or playing a game? More and more there are offerings to get access to these media via a subscription service. And even if you buy something, especially with computer games, they often ‘offer’ a subscription-based add-on, for online interaction.
So where is this trend coming from?
This is simple, the software industry has found that there is a limit on how often people and companies are willing to pay for a new version. We all know that the new version of Word or Excel does add some new functions, but there are only a few people that benefit from those. So, why would one upgrade? And if a new version of the software isn’t sold, then how does a software company survive?
The solution is, stop selling ‘perpetual’ licenses, and start selling subscriptions. With a subscription the company is ‘guaranteed’ to have a stable flow of income, and no longer depends on selling the next version of a product. And not having to depend on a specific version, also means that the company will no longer suffer from a dip in income, in the months before the next version is released.
With a subscription service, the company has a constant revenue stream, and can keep on introducing improvements or new functionality on an ongoing basis.
So, the main reason is that we see a trend that it is mostly financially driven.