OneBoxVision Blog

Perpetual versus annual subscription

A perpetual license is one that you pay for once and you can use as long as you wish. Often software services are delivered as an annual subscription. This is common for cloud based services. So why would anyone choose a software service if you have to pay annually? Lets look at the advantages. A software service is much like a rental. In this case you should not have to pay such a large amount up front, reducing CapEx. The software can be upgraded at no cost so no more old out of date solutions. The user can often avail of additional services such as remote support, and features that can be metered such as cloud storage.

Commercially, you should figure out the willingness of your company / organization to pay with CAPEX (for perpetual) versus paying with OPEX (for subscriptions)? In some organizations it is harder to get capital to spend than it is to get operational money or expenses. Subscription licenses can often be funded as OPEX, where perpetual licenses, due to the larger upfront investment (i.e. one time) usually requires CAPEX funding and subsequent amortization over a given period.

Finally, and I know it wasn't part of your question, remember that there is a very large growth area in pay-per-user (or pay-as-you-go) software licensing. This differs slightly from the above as there are predominantly SaaS (Software as a Service) vendors offering this as a "hosted" solution where the software is a "right to use" and will not be installed on your servers. With the footprint expansion of software as a service (SaaS) and successes of cloud computing, pay-per-user models have become more of a possibility and reality and should be researched if vendors have offerings that suit your line of business needs.

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Now how can this be useful for machine vision systems? Often the issue for many customers is that they have large numbers of lines and find it difficult to justify the spend on each and every line. Flexible licensing models work to remove this barrier. Site and Enterprise plans provide benefits for both vendor and customer. The vendor builds an ongoing relationship with the end user and can get feedback to improve products.

Where can subscription based pricing be applied ?

  • Plastic extruding - often plants can have 10 or more lines in one facility
  • The label industry - there are many small presses and often not enough CapEx for all.
  • Large Enterprises - many sites where it's just not economical to pay up front for solutions.

How can you apply it to what is really a machine. Machine vision is industrial IT. Its very much like installing a specialist network. The hardware based on open industry standards can be purchased using the CapEx budget as well as the expertise to install and commission . The software layer can be delivered as a service.

Think about purchasing a solution for 50 lines. If purchasing a one camera system you really are purchasing 50 cameras, 50 lights and 50 computers. Not only should you understand that the technology is fir for purpose, you should understand it's life cycle, the payback on shifting your specification up or down and if it can be upgraded with other vendor's parts. Once machine vision systems are looked at this way, CapEx costs can be slashed and the users experience enhanced as the software is always current.

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Topics: Vision network Building and buying vision systems