Dear startups: I hate subscription services (2021)
fangdaddy.medium.com
fangdaddy.medium.com
Like I never understood why most of these basic tools morph into 100+ people companies. A tool like Evernote can be built and maintained by under 20 people. Even at inflated salaries, your yearly burn would be under $10M.
This is part of a broader trend of startup overhiring. Like Better.com had 10k employees at one point. What are those people even doing at a “startup”?
This late in the startup cycle, you really need to ask why a 10k person company hasn’t IPOed and why is it still calling itself a “startup”
Simple answer: They've signed a deal with the devil (VC funding) and now need to grow to make a > 1 billion dollar exit.
Gatsby to maybe?
Investors and CEOs think they need massive numbers because they misunderstand how dev headcount scales and how much overhead it generates. Hiring warehouse workers, moderators and content editors scale, so they extrapolate that to devs and expect the same results.
Also with lots of devs you need lots of designers, managers, product owners and other idea people, so there’s a lot of minor tasks being pushed trough, which would otherwise not be if it was a 20 dev product. Not to mention the extra need of support, QA and ops people, which in turn needs more coordination and management.
Going back to 10 or 20 devs is borderline impossible, even if you reduce the scope, since the infrastructure needed to support 100 or 1000 has too much of an overhead in itself. I would love to see someone try, though.
It is also cool to have 1000 devs in case of an acqui-hire. If your product sucks, you can still sell your team. Yay.
I think that is not the issue. The issue is having a physical product that is tied to a subscription which could also be a one-time fee. Like a subscription for your dorbell - just why?
Servers (and the staff to maintain them) have an ongoing cost. Human labor is also a pesky subscription.
And it's not like there's much new functionality one can put in a doorbell. I'm not sure the server really costs that much each month.
The default option should be self hosted, with premium subscription for those who choose
one of the biggest problems is getting the information easily.
i used to ask sales reps if a device requires subscriptions, or if it is stand alone no 3rd party server required, but i stopped doing that, since no one seems to be able to answer the question. There is a good portion of -not knowing what you are even selling, but the practice of playing dumb to make the sale is alive and well.
I now make the blanket assumption that any new hardware will have this issue.
consequently im in the habit of turning junk, into usable hardware, instead of buying new. I wish this would really catch on, but most people are sucked in by the apparent convienience vs the superfluous difficulties dangled around something that really is simple at its foundation.
Pay a nickel for server time and charge a dollar.
Also the question of why the servers are needed at all is often unanswered.
Exactly.
So this is why this type of subscription is fundamentally for consumers who might otherwise employ a professional doorman.
* Are you increasing your engineering headcount exponentially?
* Does your product have a subscription model?
It's no different with physical products. I've seen investors ask:
* Does your product have a consumable that you can sell for recurring revenue?
* What is your strategy for becoming a primarily software company?
* When will you be moving to China?
In Evernote's case, though, they did build things like inhouse OCR and a web clipper before the modern age (eg. Amplenote's OCR is just bought from Microsoft)
The point of a startup is to make lots of money, to provide a large return to early investors; they definitely don't want to offer their product for free, and only want to offer it cheap if that's all the market will bear and they can get enormous numbers of sales by doing that.
> Like I never understood why most of these basic tools morph into 100+ people companies.
The giant company was the goal all the time. The basic tool was just a starting point.
For me, it's not about the amount of money, but the peace of mind (no additional bills, no additional shit to renew when I my debit card expires, and most important, I don't need to engage in any bullshit cancellation process). In the rare cases where both a subscription and a single payment is offered, I've done the math and from time to time I actually estimate that I'll spend less money on the subscription (although normally it's the other way around, of course), but even in these cases, I prefer paying upfront. I hate that this is becoming less and less available.
I doubt many would actually use it because complainers on HN aren’t average users, and the number of months you’d have to prepay would likely be quite high to actually make it make sense for the businesses involved.
But still, if you could make a business reselling monthly subs as 1-off purchases, it would be pretty dang cool!
This was also the case for everybody who had bought a perpetual license for Adobe products and then did not subscribe to them when they switched to a subscription model.
Third parties promising it would still be at the whim of the original provider. If they shut down the service, what would that third party do to fulfill their promise to you?
What we need is open, documented protocols for internet-connected hardware and escrow for pure internet services, with a guarantee to open source if the original provider shuts down their servers.
The latter will be difficult to enforce. The service provider could, instead of shutting down the service, just raise prices to something above absurd, and then shut down once all customers are gone.
$699 vs $49/mo. Now maybe $20/mo since they no longer force bundling and have lower cost feature restricted versions.
The math was easy at the time because you’d break even in 2 years with the old price. Now it’d be like 4 but plenty of users were on CS2 for 6 or so.
Since 12x is your 1 year break even rate it’s not too unreasonable. Especially if you’re not upgrading it ever year.
By the way, I really like this subscription model by Due:
"When you purchase Due, you unlock every feature today, including any new features that will be introduced in the next one year [.....] The Upgrade Pass is an optional subscription that unlocks features permanently, even after the subscription lapses. Any feature unlocked remains available to you forever."
https://dueapp.zendesk.com/hc/en-us/articles/360053244591-Wh...
Especially for software I rely on I want the developers to consistently earn money so they keep motivated to work on it, do maintenance and fix bugs. I don't pay for software, I pay for the thing it allows me to do. Me paying a subscription fee creates an incentive and responsibility to keep things working.
If there is a backend component to its even more important as they will have continuous cost.
Also the "one off" model usually means you'll pay for versions which is not always cheaper. Take Sketch for example, some of my clients use it so I had to update each year spending 99$. With subscription I could just use it for a project and cancel afterwards saving money, something I have done with Adobe software (although I find their prices way too high).
If something is too expensive I will find alternatives, that has imo nothing to do with the subscription model.
Is it really reasonable for software industry to drain so much money just because it takes some effort to write a program that won't magically rot in a few years?
Security vulnerabilities don't change OS APIs. OS APIs are one of the most stable constructs in computing.
There is a huge subset of software that doesn't require interaction over the network, and can be written to last. And even inherently network-dependent applications could be written using p2p technologies, making them independent on anyone's computer. Just because the everything sucks right now doesn't mean it has to.
Look at drivers. Usually you update those yourself. Some managed services exist, but they break often, leaving the system in an unusable state.
You buy the game once, then get access to online multiplayer servers.
Subscription models encourage constant needless changes to the product.
And expansions, dlcs, seasons, are a way to subsidize such online services.
How many games that offer no additional packages keep their online offering working forever?
All the games that actually released binaries for hosting your own servers. That used to be the standard back in the day.
The exception is the most played multiplayer game in the world.
Microtransactions, usually a lootbox like system so the gamblers pay for the rest of the players (quite profitable)
DLCs
I can't think of any other common ones.
As does the desire to sell paid upgrades.
Yes, you also don't get updates to it.
That is actually perfectly fine for countless bits of software.
I have 30 year old software, and it still does it's original job just fine, if I happen to be ok with all it's original limitations. It's too late to try to say that is an insane idea, since, I already have it in my hands to prove that it's possible.
And then there is media. Every provider wants to force everyone onto the perpetual rent, nothing to leave to your kids, model for books/music/video, not just software. What's the "it blows my mind" excuse there?
It does not blow my mind at all that there are people on HN trying to excuse and justify this rent-life hell they've created for everyone else. It is the most obvious thing in the world.
This is an overused excuse that does not actually justify nearly as much as what it's used for.
Also, online services suffer leaks and outtages and 3-letter/police pressure that I have no control or knowledge of that self owned self hosted software does not.
None of the excuses for rent hell are actually valid. They are just the excuses used to sell the idea.
The fact that services have their own problems does not mean there is no such thing as a valid service, or that the security update issue is not a real thing, it just means that this security update issue is just a thing like a lot of other things, that only really necessarily applies in certain cases, and doesn't apply everywhere, and doesn't override all other concerns, and there are other equally valid issues that are addressed by the opposite sort of model. Ie, it's nothing special and does not excuse or trump anything else.
Although, I think some companies use recalls in a dark pattern, specifically baby product companies.
The EU's Safety Gate programme documents safety recalls all the time, and it's common to get an email (for bigger purchases) or see recall notices at the entrance or checkouts at retailers. Retailers of safety-critical products (medical equipment, lifejackets, climbing gear, etc) will often insist on a phone number or email address in case of recall.
Incidentally, perhaps you can eventually be paid back for your stroller or crib if you do keep the receipt and watch the lists.
Thrift stores will have to check recall lists of donated items and discard the ones that are recalled, or there might be some legal exposure.
If spftware industry is a joke and can't sort out it's own mess, its on us, not the consumer
In the United States, the landmark product liability case was Escola v. Coca-Cola Bottling Co.. In the majority decision, one of the judges wrote:
> Even if there is no negligence, however, public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot. Those who suffer injury from defective products are unprepared to meet its consequences. The cost of an injury and the loss of time or health may be an overwhelming misfortune to the person injured, and a needless one, for the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. It is to the public interest to discourage the marketing of products having defects that are a menace to the public. If such products nevertheless find their way into the market it is to the public interest to place the responsibility for whatever injury they may cause upon the manufacturer, who, even if he is not negligent in the manufacture of the product, is responsible for its reaching the market. However intermittently such injuries may occur and however haphazardly they may strike, the risk of their occurrence is a constant risk and a general one. Against such a risk there should be general and constant protection and the manufacturer is best situated to afford such protection.
There are some things to unpack here.
First, as a software developer, you are supposedly the expert and are in a far better position to evaluate your software and its potential hazards. Your customers are neither required to be experts in your software or how it might harm them, and realistically have no way to properly assess it no matter their skill level, so the responsibility falls on you.
Second, it is in the public interest to dissuade software developers from releasing faulty, broken, dangerous, etc software to the public. If a law which makes you responsible for the results of your software's failing makes you think twice about selling it, then that is a benefit to the public. If you aren't confident enough that you can accept the liability, why should your customers.
https://en.wikipedia.org/wiki/Escola_v._Coca-Cola_Bottling_C....
Consider the example of a music player that was mentioned in another comment upstream in this thread. Suppose a company sells music player software that turns out to have a RCE vulnerability when run on a maliciously crafted .mp3 file. Should they be liable?
It's helpful to consider a physical product analogy: imagine the company sold a cassette player instead. Now, let's say that someone designs a malicious tape that is lined with noxious chemicals, which when played in the cassette player causes it to catch on fire and explode. Would anyone regard the cassette maker as liable if this caused someone to die or a house to burn down?
In the Escola v. Coca-Cola Bottling Co. case that you cite, a key phrase from the majority opinion is:
> Upon an examination of the record, the evidence appears sufficient to support a reasonable inference that the bottle here involved was not damaged by any extraneous force after delivery to the restaurant by defendant.
In other words, there was no 3rd party malicious use or manipulation of the bottle: it exploded during "normal" use. If the bottle had exploded because some 3rd party had deliberately weakened the bottle, or added extra pressure before giving it to the waitress, there's no way Coca-Cola would have been liable.
With respect, a malicious tape lined with noxious chemicals is not analogous to a maliciously crafted .mp3 file for several reasons. First a tape lined with noxious chemicals is dangerous unto itself.
Second, it is not reasonably foreseeable that a tape deck would be used to play a chemically sabotaged tape. If there were millions of tapes in circulation that could cause a tape deck to self-combust, the manufacturer would be (at least partly) liable for that foreseeable outcome. They would be required to take steps to ameliorate that possible outcome.
It is now reasonably foreseeable that software designed to open arbitrary files may be subject to a maliciously crafted attack.
Should medicine manufacturers be liable if someone circumvents their tamper-proof seals and laces them with a poison?
Should berry growers be liable if someone inserts needles into foods that are sold at supermarkets?
All of these are crimes that are either widespread or famous from media scares that happened in the past, and thus foreseeable going ahead, but I think liability would still be limited because the resulting harms are caused by a 3rd party criminal act.
This is an interesting hypothetical, but I don't see the relevance.
> Should medicine manufacturers be liable if someone circumvents their tamper-proof seals and laces them with a poison?
Yes, and they are.
> Should berry growers be liable if someone inserts needles into foods that are sold at supermarkets?
The retailer should be, and is.
> This is an interesting hypothetical, but I don't see the relevance
That's your willing ignorance, and on the 2nd point too.
If by my second point, you're referring to circumventing the tamper-proof seal on medications, then maybe you'd like to expand? Manufacturers, retailers, and medical staff are (jointly) responsible for medications for their entire life cycle. A retailer who sells a poisoned medication is absolutely liable, as is the manufacturer who produced a fallible tamper-proof seal (which is worse than no seal at all).
Feel free to elaborate on why you think I'm wilfully ignorant.
@d13 What if the house magically changed shape so the chair couldn't be used any more in that house? Suddenly one day you'll need to sit on the floor and eat, until you had gotten new chairs, for the new shape of the house
Who would you sue (the house or the chair company or no one?)
Or instead, when the house changes shape randomly and whenever, what about paying the chair company for upgrading your chairs to match the new shape of the house (and you'd never have to cook and eat on the floor)
(It makes little sense, I think, to compare software with chairs and houses. Unless the houses are magical as per above)
If the lobby of your building has a fancy chair in it, the furniture company isn't going to expect $10 a month forever to keep using it, and on the flip side, if the furniture turns out to be accidentally made of asbestos, it's the furniture company's responsibility to do something about that, regardless of the fact that you're not paying them every month.
Is there a version of the concierge that's a one time purchase? Probably not a good one? The fee your paying is for 1. continued incentive to continue doing a good job and 2. Training and improvements to the staff.
Is there a version of the chair that should be a recurring fee? Maybe if the chair company comes and swaps out the chair every month, but then you're not paying for the chair, you're paying for the chair service. Should the apartment building have the expectation that under a flat fee the fabric in the chair is going to get upgraded to fit new styles and tastes? No, that's never a expectation when you buy furniture. The only case where the manufacturer would be beholden to you would be if there is some gross defect in the product or if there was some negligence on their part that could lead to injury.
Realistically there's not going to be an issue where a chair lets robbers in, but if you bought a door lock for example, and the lock failed when someone tapped it, you're not SOL because your not paying a subscription to the lock maker, they're liable for their defective product.
There's absolutely cases where software should be a subscription model and there's absolutely cases where it shouldn't be.
I don't need any features that have been added to Adobe Premiere since 2013. I don't want or need updates--my copy of CS6 still works. I'm not getting a CC subscription.
If I needed software to help with accessibility compliance, I would absolutely be willing to pay a monthly fee because the standards change and information becomes out of date quickly. It would be an unreasonable expectation that a lump sum I paid in 2013 would still have my websites up to code today.
--
Forgive typos, on my phone.
My thoughts on this:
1. How long would it take a team of 4 people to build this with just the features I need for a single user?
2. How much would it cost to contract a team to build that (ball bark)?
If it can be done on a single person's salary, I'm not paying a monthly subscription, no matter how inexpensive. I'm also not contracting that work either, but I might be tempted to compete with them if my employer let me (they won't).
Only certain things make sense as a subscription, and those are things that have an infinite (or practically infinite) cost to the consumer, thus they should have an amortized infinite cost.
Do you think there's a case where something might have an infinite cost to the consumer but a finite cost to the company? Ie a solution to some recurring problem that, without the software or service the customer would endlessly pay for, but with the software or service would not incur the recurring cost--and in that situation, do you think it would be fair for the company to charge a recurring fee given that it's not costing them to continually develop it? So the customer is saving money compared to before they had the software but it's not supplementing a cost of development?
Now you’ve set yourself up for a community to grow: core devs you pay, customers that contribute code and help diagnose bugs, customers that pay you only for support, and customers that pay you to do everything.
I did this once, and the support-only customers were the most interesting. They helped locate latent race conditions that only appeared on underpowered hardware, but could happen on over-subscribed machines (like the hosted version), and so much more.
I never got any contributions on the code side, but one guy randomly took over responding to issues without being asked to. By the time I got to them, it would be ready to close or I would have enough information to address it immediately.
If you are going this route, just be aware that companies *will* eventually replace you with a home-grown solution. Even if it takes years. So ask yourself if you want to be the solution everyone goes to, you need an FOSS solution to give people. Otherwise, you’ll be replaced with the other ones, eventually.
IOW, if a company like auth0 were to have an open source server, they’d be killing it everywhere. Five or six years ago. By now, there’s enough free (as in free speech) solutions out there that they will probably never be the default solution, just one that you pay for for a little while until you figure out how or have the time to host your own.
Why you might need updates: 1. New functionality (if you need a particular feature that was not available before) 2. Security issues
These are not industries where people make programmer wages. Combining all of the required software costs is very expensive. Subscriptions more closely match the model/needs of the producer, but they are often quite bad the consumer.
Your analogy is flawed. Rather, you will never indefinitely get the latest quality chair for free after buying it. Nor if tomorrow plastics are banned, they won't replace your chair with wood or metal for free either. And if the fabric wears, they won't replace it for free either.
So, why should software updates be free in a dynamic computing world?
It's fine for the rental option to exist, the problem is only when no other option exists, and, increasingly, no other option exists.
Please don't waste our time pointing out how this is generalization and alternatives do exist technically for most things. It's obviously not 100% services, but the entire world of software is becoming more and more each day, worse today than yesterday, worse tomorrow than today, a choice between two opposite ends of a spectrum: 0% ownership in the form of services, and 100% ownership in the form of open source. Each of those are fine in various circumstances.
For many things, and increasing, no practical alternative to "RentACenter" software exists because in most cases an individual is not realistically free to do their own thing if they want to sell to customers and buy from vendors and interoperate with family and friends who all take the easy path and use all the major services, or even without interoperation issues the alternative option simply doesn't do the same job or doesn't exist. And the damning thing is that it used to exist, meaning the rental model is not a required aspect to produce the product to do the job.
Does software want to become the printer industry?
I loved this model, it clearly linked revenue earned by new versions to the value provided by the upgrade.
IMO, subscriptions are intended to shoehorn users who would only upgrade every few years into the equivalent of the “yearly” upgrade cycle. They’re a way of avoiding the accountability that comes with paid upgrades.
Personally, I have two subscriptions that I will dump the instant a quality pay-once alternative appears. Locked-in customers are the worst kinds of customers.
This is part of the problem. Give me software that runs locally only, and there's no need for "backend support". This insane integration of local software with unnecessary remote services is absurd.
But yes, obviously one should pay for feature upgrades, as it was in the 90s. Everything went to hell when software started having the Internet as a core dependency.
Why can't software ever be "finished" or "sufficient" to meet your needs? I don't see the point of having software is updated day after day, month after month, if I am not interested in the new features they bring.
With that said it can get problematic fixing old third party packages that are no longer supported.
Like, take photoshop for an example. If you're a photographer that only ever edits your own photos, the odds of a needing a security update for photoshop are really minimal.
If you regularly edit photos from clients, maybe it's worth considering.
Is it riskier than keeping an updated copy? Sure. Is the expected return period of a hack given your circumstances above a threshold that is acceptable to you? Maybe, maybe not.
That seems like "hey, we develop our software the worst way so that it's always full of bugs, but if you want less bugs, buy our subscription". Complete conflict of interest vs making quality and well-tested software in the first place.
some people still use a 90's version of wordperfect, and that's fine, but if you have software that depends on other software - example Qt3 was dropped everywhere, even though there's plenty of useful Qt3 software around, it needs to be upgraded.
So even if your system wasn't buggy, it may be incompatible or the dependencies no longer are updated (like with Qt3, which had networking and other helper functions), you wouldn't want to keep using it.
Photoshop, for instance. I don't need it to have new features; there are certain things I need it to do for me, and that's it. I don't need constant new features. But I do expect security updates.
Same model we have with cars (that BMW is trying hard to upend): it has the features I need, and if there's a systemic defect that poses a safety risk across those models sold, they're expected to fix it.
I agree that subscriptions have become toxic in their prevalence.
Isn't updates to software in response to emerging security issues a "feature"?
I used to use an old version of Quicken for Mac (this was back in the MacOS 10.2 days). It was "finished" in that it did absolutely everything I needed and there were no bugs that affected me. As time marched on, Apple switched from PowerPC to Intel which was fine because they had technology (Rosetta) which allowed me to run PowerPC applications. Then they dropped Rosetta, so now I had to choose whether to upgrade MacOS or continue to use Quicken.
I now use software called Banktivity to replace Quicken. Much like Quicken, Banktivity is "finished" as far as my requirements go. The version I have is Intel-only and Apple is switching to Arm processors. How long will Rosetta 2 last before it's pulled and I'm forced to choose between upgrading my OS and using this software?
I think there are similar things in the mobile world too. I think Google requires apps to use a minimum API version to maintain a listing in Google Play. I believe Apple does something similar with the App Store too. So short of regularly recompiling, testing, and publishing your app, everything in the stores has a finite lifetime.
Linux might be doable too if it doesn't have a bunch of shared libraries or if you at least know what versions it needs.
In gaming this has become mainstream as GOG and Steam now leverage DOSBox for this purpose.
Personally I think vendors beyond a certain size should be regulated so they must maintain BC for some minimum period like 20y. Regressions should incur fines unless it's proven they are required for security fixes.
I’ve got a few GOG games and they’ve done an incredible packaging job with DOSBox - if there was a way to take an old PPC Mac app and package it up to run in a similar manner, I’d have probably taken a serious look at it back when Rosetta was discontinued.
Microsoft operating systems have always strived to make that impossible.
Apple has to compete somehow.
When you push unfinished, not-fully-tested code out the door, even if you can confidently patch it later, it's just never been the most professional thing to do.
Especially for something that could be mission-critical like an OS.
Getting it into people's hands sooner is no excuse.
This kind of thing really lowers the bar when it comes to the rest of the development ecosystem constantly engaged in making temporary solutions to permanent problems.
This ripples out and overflows far enough to effectively be a major anti-recycling effort for megatonnes of hardware itself.
That's the one thing I've never seen someone accuse Microsoft of. They're famous for their obsession with backward compatibility.
It sounds like you've had a different experience, and now I'm curious. Care to share?
I've had software break in the forced feature upgrades of 10, and I had BSODs when printing on every machine I supported at work thanks to a security patch.
This might actually explain why 10 and 11 have been the most flawless experience I've had with Windows while so many people have endless trouble. It might be similar to the transition to NT in XP: everything broke, but almost everything made after was more stable and secure.
Each version of Windows was designed to ideally trigger a purchase of new hardware as a concession to the hardware partners, while each purchase of more powerful hardware was designed to be prohibitively difficult for users to operate using previous Windows versions, triggering a new OS purchase.
Non-Microsoft software suffers more from this disadvantage, compared to the benefit of having some of the Microsoft non-OS software function fairly well across a few OS versions.
I understand how embarassing it would be for users in general to have become aware of how much higher performance they could have gotten from using a previous version of Windows on the next generation of hardware, so this was always made unnecessarily difficult if not impossible.
Also how much hardware could have been saved from scrap heaps if maximum utilization of hardware was given top priority?
When the main reason for growth in manufacturing was consumers purchasing their first computer, this is not as much of a problem.
Once computers are ubiquitous, each new purchase triggers a corresponding waste declaration event.
Accelerating growth pressure under these conditions, while failing to even provide archives for "outdated" code needed to operate remaining vintage hardware, amounts to an overall anti-reuse/anti-recycling strategy.
For a very long time the driver was operating system and hardware features.
Sketch is now subscription-only; previously you paid for one year of updates. If you stopped paying for updates you could still continue to use the desktop app (i.e. the app did not expire).
The current Sketch model means you can use the app only when you pay to use the app: pay every year, or pay for a monthly usage.
I totally understand subscriptions for online services that run on provider servers/storage etc. (like Evernote) or content services where you get access to a vast database of always growing content, that you would never afford to buy at once. But stuff like Bear notes, Autodesk Fusion 360, etc. These I don’t understand. If you cannot justify a new version users want to pay for, then don’t make it. I think most users would gladly pay for new features and improvements. Just don’t make them cash cows driving your business model on fear of loss.
They shoehorn their cloud service and certain operations are done on their servers, which are awfully slow. It seems like they added this to justify a subscription and not to give any benefit to the user.
Its usually quite darkpattern-y in vibe. See trials that switch to paid, or discounts for 1 month (heavily advertised) then extortionate rate (in fine print) after. Or easy online sign up, phone in during office hours to cancel. Or getting mercilessly hounded to re-sub after cancellation.
If they just behaved a little less scummy things would be better
https://www.thedrive.com/news/bmw-is-charging-a-subscription...
https://www.wired.com/story/bmw-heated-seats-as-a-service-mo...
VCs and other investors including public markets would rather see $1M ARR recurring through subscriptions with low churn than a single year with $10M revenue and no subscriptions. Even multiple years of growth in non recurring revenue will often be valued lower than less growth in subscription revenue.
This is why SaaS type models have taken over and why every other business is trying to desperately shoehorn in some kind of subscription revenue. The latter gives us car companies with subscription cloud unlock services, etc.
To play devils advocate:
- it streamlines production massively
- while still allowing the most affordable version to be bought
- but improves product options on the secondary car market
Im no fan of BMW's subscription model, but when you're leasing a car, it's effectively the same.
Edit: I'd rather have the option to opt out of this pricing scheme even if it would coust me more upfront
I went as far as calculating it. If you’re a leasee, the heated seat subscription saves you money over your 3 years of ownership.
BMW being a luxury brand, a large chunk of owners are going to lease.
Plus, BMW had an option to opt-out and buy lifetime.
I don't know many BMW owners that keep their cars for 10 years.
To their mild credit BMW is at least charging what amounts to a discount for the subscription for their typical buyer, as long as they stay on top of whether they're subscribed or not.
I guess you could say it's annoying to have to subscribe and unsubscribe, and it would make a lot more sense if the subscription guaranteed that the hardware was repaired for free. Still, heated seats rarely break in modern cars from my experience.
With one-off payments there's the obvious issue that you're either overcharging in case the startup (which the article talks about specifically) fails or you're severely undercharging which I think is more common if anything.
Just a few days ago I noticed I still have a lifetime membership for a podcast app that I once bought for almost nothing and they still ship features. While lucky for me personally not necessarily great for either the devs or other users who joined later after they switched to subscriptions.
You can see evidence of that in our general industry trends, where software is either "being worked on" or "dead", but can never be finished.
That's tolerable for pure software projects, but now we're increasingly seeing the same trend with physical devices.
I notice that you feel bad for the devs of the podcast app, but not so bad as to give them the word of mouth marketing they no doubt hopped would be the fair trade value of early lifetime memberships.
What VCs are really looking for are big multibillion dollar exits. And you can't get there by selling $50 perpetual usage licenses to consumers.
It's a real shame, because most software I use can be written by a handful of good engineers in a couple of years. You can make great software that stands the test of time this way. But businesses that operate this way are not investible. And they now have to compete with free products dumped on the market by goliaths such as MS and Apple, and with free products made by venture backed companies that just want to gobble up market share, aiming for a monetizable monopoly down the road.
And what if the engineers bootstrap instead of taking VC lucre?
1. Free = problematic with the lack of money
2. Freemium = looks good if the balance is right
3. Ads = Mostly works but the model is flawed and skewed
4. Subscription = Love/Hate currently trendy but too relied on
5. Pay-what-you-can = Fans provide the service for everyone
6. Premium only = Only what it's worth, when it's worth
7. Enterprise = S'ok because my company/org pays for it
8. Tokenised = S'ok because the next person pays for mine...
9. Charitable / foundation = Someone more wealthy pays
10. None of the above = For now somehow it works
There are probably 10 more models already, 10 more out there and 10 more coming soon. Get thinking, stop complaining.
How about for maximum flexability we do a per user rolling monthly license.
For scale, I've been using VIM for almost thirty years. Twenty years is not an exaggerated number.
It might make the software prohibitively expensive though.
With a subscription model, there’s a point where the consumer has paid you “too much” and they will either cancel or find another solution. This is also known as churn. If your avg customer pays you for 8 months, this is a pretty good indicator of how much customers are willing to pay, but you can likely charge more for a one-off cost, sometimes 2-5x more.
Since you are likely combatting churn by finding new customers, switching to a one-off model means you can just find new customers and not worry about churn since it doesn’t exist.
Don’t get me wrong, sometimes subscription models make a lot of sense. Most of the time they don’t unless you’re selling something that has an infinite cost anyway (like immediate access to “all” movies ever made like Netflix) and would be an infinite cost for the consumer to do it in some other way. But if I can pay a contractor to build your app for less than infinite money, then it shouldn’t cost an infinite amount to use your product.
/s
The problem is that a lot of things that aren't a service are being rebranded "as a service" just to extract free revenue.
Although it does sort of put pressure on the developers to actually refine their product and continue to deliver tangible improvements. Nobody is going to pay for a UI that's been re-arranged a bit.
I can't think of a single subscription service I use that doesn't continue to deliver new updates and value on a regular basis, and other than Adobe's bullshit "annual masquerading as monthly" drama I haven't come across something I wished was still packaged.
Softwares can't sell like hardwares. When you buy a toaster for example, after the warranty expires you pay for every time you take it out for repairing. With softwares customers expect a life time of warranty, bug fixes and improvements.
Jetbrains has very good model in that regard. Hope they will not ruin it (new pricing for self hosted Spaces is bit concerning).
Sell it as is, or with a very short one year support window. Exactly like all sorts of companies used to profitably do until they realized they could extract more value for the same work with a subscription.
Rent-seeking in the most literal form...
The stores also lack (and still do) an easy way to sell new versions, so here we are. Subscriptions.
I’d love to say pay for a feature set that I really like and pay a “lower” subscription for it for ever. Even if at some stage I am forced to upgrade because developers have too many versions that they need to maintain.
1. Every SaaS business should be compelled to offer both a subscription price and perpetual license at a fixed price.
2. The fixed price of a perpetual license should not be more than 10x or 20x (?) of the monthly subscription price.
3. If a user has opted for subscription payment, they should get a perpetual licence after they have paid a certain subscription amount over a period that is not more than 2x or 3x of the fixed price of the perpetual license.
4. SaaS businesses should not be allowed to hold users data hostage if the user decides to end the subscription. (This can be tricky if the data is in some proprietary format).
5. As much as possible, the SaaS should be able to run offline on a user's computer without needing to offload computing to servers.
Ofcourse, most of the above are practical only for software that you can actually run on your computer and don't require massive computing powers from data centers that some services may need. But then again, that's exactly the kind of software that don't need to be SaaS at all in the first place, as the article too points out.
Regulation, on the other hand, does tend to lead to rent seeking behavior as incumbents use those laws to their advantage and forcibly block new companies.
It’s much easier to overcome high costs than bad laws.
And that's only because of current regulations and anti-competition laws. Turns out "free market" is only "free" when the giants are asked to behave and punished for bad behaviours.
I still think this has much more to do with market interventions enabling 'artificially' large economies of scale. Infrastructure, police, subsidies/grants, IP protections--all played and continue to play a massive role in shaping markets today.
The opposite effect is you are pressured to keep using the product and I feel my friends are losing valuable time because of their Netflix subscriptions.
Pay-per-use might also be a similar option, and I'm happy with many web services working this way.
I was thinking monthly as that is the usual billing interval. Minimum 1 month subscriptions, then pause the next month if you want to be busy for example. Maybe even weekly or 24 hours would do.
I would argue that it has been proved that this model doesn't work, because it unalgins incentivess between the developer and the user: the developer will look tho maximize revenue, catering to better paying ads and more clicks/interaction with them, while the User will try to get more usage from the main app.
I want applications that give me an EXE that I can use forever , even if the company disappears. And then the option to pay yearly or monthly for updates to said Exe (even as replacement EXEs) that give me more functionality, bugfuxes and secfixes .
The immense majority of subscription services go to great lengths to make it as easy as possible to get you on and too many go to great length to make it very hard to let you stop.
We are at the point where I believe there should be regulations that forces a company to make it as easy to stop as it is to join.
Also you named it: service. Not everything is a service, and not all services are required. While you can't easily avoid insurances, bankings, healthcare, internet/mobile provider you can easily avoid spotify, office365, netflix, evernote or telegram or a gym subscription.
> telegram
Not if important contacts are on there.
The point is, there is a clear trend. Various things we traditionally saw as "products" already morphed into services and I don't see any indication this will reverse in the near future.
On the contrary, with more devices becoming connected, the trend will likely increasingly include physical devices. See BMW's experiments with requiring subscriptions to use hardware you already own. See also the whole John Deere debate from a few years ago. Etc.
So while not technically impossible, it will become increasingly harder to not use services.
You can't rely on information from 3rd parties - those parties are under no obligation to tell you the truth, could be wrong or out of date
I make good money, but I can’t afford to have 10 subscription services for 9,99 per month. I have a few for 0,99 per month.
So 100 a month total? Surely that's not any kind of issue if you're making good money? I get tons of value from the services I subscribe to.
It’s just supply and demand. If not enough people want to pay that subscription, they will stop and change model (or shut down).
But if this is sustainable enough to pay for their dev, it doesn’t look like they should cater to you as those are non critical tasks for you and they barely have any impact on your life.
This is correct. Most of the complaints here amount to “it’s too expensive” which like, yeah, it’s too expensive for you. So don’t buy it.
(Somehow HN — on average, obviously not everyone, but the zeitgeist say — manages to at once complain about companies constantly losing money, and also about companies that charge money!)
Seems like it, that’s why we are complaining :)
Of course this does not matter, because the MBAs in charge showed in a PowerPoint presentation that the subscription model will squeeze 11.1% more money for customers, mostly from people who forget to unsubscribe.
Someone who only pays for something once isn’t a customer that any company should want to attract in the first place, especially when you consider marketing costs.
The author would pay the LTV or even more, but the author is in the minority. Most people would pay some small amount of money once and then happily never pay another dime. They don’t drop hundreds of dollars on their LTV.
The author used Adobe as an example, and that’s where I should point out that it was one of the most pirated pieces of software on the market. SaaS basically eliminates that issue entirely.
Also, most consumers budget on a monthly basis. Ten bucks a month is easier to swallow than $150 all at once for a permanent copy of something like Microsoft Office.
For businesses, they were buying support contracts anyway, SaaS makes even more sense for them.
So, yes, that’s why everyone is SaaS. These businesses that operate on the model know it’s successful and more lucrative than one-time sales.
You might hate it, but the balance sheet doesn’t.
Subscriptions make more sense for both users and businesses. It's not like you can fire the entire product team once you finish shipping a version of the product. And for users, the upfront cost is less and you're getting updates more frequently. You can also cancel if the service isn't what you expected. The power swings in the favor of the user more.
At the end of the day, it's all about life-time value anyways. Selling two copies of your software for $120 total is the same revenue as selling $10 subscriptions for 12 months.
I remember when you could buy software, learn it, and use it effectively, without having constant habit-breaking changes stuffed down your throat. I remember when you owned your data and didn't have to rent it from a service provider. I remember what it was like to trust my machine, because everything was happening locally and software wasn't phoning home.
Subscriptions incentivize selling programs that are in a perpetual unfinished state. We lost the opportunity to call a project "feature-complete". LZMA2, H264, and RSA/AES were developed years ago, yet 7zip, netflix, and ssh still need regular updates for some nonsensical reason.
Do these businesses want me to find out who's charging me by doing a chargeback and seeing who gets mad? Can there be some better standards for how transactions are documented in financial records?
They abide by KYC so not good for true privacy, but they are very very good at containerizing your recurring expenses
Some subscriptions are horribly expensive. $8/month for something I’d be happy to pay $10/year.
That’s the real problem. A lot of services come out at $50/$60 per year with minimal improvements over an OSS or ad-supported tool.
The support is nonexistent and their pricing is consumer unfriendly. You can only make yearly subscriptions and even the student prices are high.
Acrobat for 180€ a year and it crashes one in 10 times when I convert some things and takes all the edits with it to the grave. Ridiculous.
I pay for the "photography bundle", which is Lightroom + Photoshop + some cloud storage (which I don't use). Before the subscription-based model, these two would cost some 8-900 euros.
At 12 € a month and 800 € for the bundle, that's 66 months to break even, or 5.5 years.
Sure, you could use the same version for 20 years if you wanted. It probably works on Windows, but probably not on the mac, what with the CPU architectures changing. And there have been improvements that I, as an amateur photographer, am happy to have. For example the new automatic selection that landed a year or two ago in Photoshop. Could the same be achieved by a skilled professional with the path tool? Probably, and maybe even better. But I'm not that professional, and I don't want to sink hours and hours into this.
To me that's actually a pretty good deal.
Now, you could argue that the product isn't worth it because X is better. But that's a totally different argument.
Starting a software business, the sort that used to be based on the shareware model, or one time fees, can be enough to sustain a small or one person team. But that's not enough for the startup crowd, they're looking to be millionaires.
I'm with the authoro on most of this. It's gym memberships, basically. The ideal customer is one who never uses the facilities but auto-renews forever. But software is an interesting exception.
IMHO subscription is the best monetization model for software. Why? Because it aligns incentives between the consumer and the seller. Many people would rather pay $5/month than $150 upfront. It means the company (generally) is constantly updating and fixing it. With shrinkwrap software, there's a direct incentive to declare a new major version, sell an upgrade and stop fixing/updating the old version.
Adobe used to do this with the RAW camera plugin for Photoshop. New camera came out? It was only added to a new version of the RAW plugin. That RAW plugin for no reason whatsoever required the latest version of Photoshop.
The negatives about software subscriptions here are really negatives about Adobe. Adobe does use dark patterns to get renewals, only offers annual subscriptions and probably charges too much. The price here is off. You can get Photoshop/Lightroom for (IIRC) $10/month. The complete collection is $50/month.
The standard counterexample here is Jetbrains. Monthly or annual billing, lots of notifications about upcoming renewals, decreasing pricing for long-term customers, reasonably priced personal licenses and you get to keep the version you had when you stop paying indefinitely.
My point is that software subscriptions aren't inherently bad. Adboe is bad.
But Evernote is garbage with their API, their SDK's are rarely updated and they use odd protocol called Thrift.
But Thrift adds and RPC mechanism on top of that. Google had their own protocol buffers based RPC (called Stubby) that wasn't open source at the time (we're talking 10-15 years ago).
No, if anything it's the opposite since you don't want this month's payment to go to waste. Although I don't have the data, I wouldn't be surprised if consumers actually don't care that much about "getting their money's worth" for most products.
Probably wouldn't be very popular with apps, because now they can't sell a subscription, but it's an idea.
Some, like Bear, still sell a subscription while using iCloud for syncing (not to bash on Bear, the price is reasonable).
This year Ahrefs, a popular marketing tool that indexes the web, changed their pricing model to impose a strict 3,000 token limit on report generation. That limit used to be 1,500 and reset on a weekly basis. This is for the $200/month plan.
Now if you “accidentally” use all 3,000 reports you are essentially locked out of the platform, like I was.
What that means is that you can no longer use the export feature, which left me with a million+ unused rows.
I had been their customer before, and I was told they did send out an email about the new changes (just not to people who weren’t active subscribers), and their official blog post was very sparse on appropriate wording that the report limit was changed so drastically.
Was it my fault in the end? In more than one way, yes. But does that make me hate this approach less? Not in the slightest.
Office for Mac wasn't great, especially in 2008 when I first got it, but it still gave me a good 13 years of use. Given a purchase price of $200 and a subscription price of $65/year for Office365, I'm very confident I get a better deal with the one-time purchase, even though I know I will probably eventually need to purchase again. (The fact that I don't get low quality add-ons like OneDrive is an added bonus.)
Constant maintenance of software is overrated. Most features being added these days bring negative value.
They don't?
My uneducated take?
- People won't buy anything full boat that they can buy monthly - People prefer monthly payments - People don't actually track their monthly payments, because generally people are bad at money stuff
It's not an accident that BNPL companies like Affirm and apparently Apple now are mooning right now
Personally? I really like software subscriptions. They are zero commitment, auto-updating, and usually a good value relative to the price. When I'm done with them, I stop paying. Easy.
Amazon Subscribe and Save is a perfect example. The items I get that I'd usually skip on getting until I absolutely had to (because work and life get in the way) come in bulk every three to six months when I need them. That's incredibly valuable for me.
Most of y'all who are for paying full boat are speaking from a privileged position where full boat isn't much. For a lot of people, Office 365 with Word, Excel and PowerPoint for $6.99/mo is a much more achieveable than the $99 for a single version with feature-toggled restrictions (and better than dealing with cracks).
Then again, I think that ownership in general is overrated, so I realize that I'm a contrarian on this
Dear customers: I hate demanding of free plan, self-host and open source. My family is starving.
If your customers only want one month, sell them one month and be done with it. If you’re selling something good, it will be missed, and if you’re not maybe try doing that instead of building a business on the hope that customers will forget about you.
SaaS can only work with a continuous revenue stream because the software provider has to keep delivering the service, and doesn't know how long it will be necessary to do so. LTV predictions are based on the assumption that customers churn, but what if they don't? If you charge the LTV as a one off but got that wrong, you're out of business.
With proper software, that you install on your device, you power everything, therefore one off licences can work.
There is also the whole way to ship software that has to change for a shift away from subscription, but are consumers ready to wait for yearly releases and pay for these ? Are consumers ready to install software again? Not so sure!
If you need more server side action than that, I think you’re selling a service in addition to your app, and then yes, you need subscription revenue.
Often it’s bad idea though, I doubt you’d find many people who prefer Photoshop “cloud” to old-school Photoshop-on-a-Computer.
The challenge is how would you reconcile this underlying costs with a one-time-payment? It's a tougher problem than it seems, if yoy include other variables in the equation like inflation, volatile nature of softwares , etc.
Nonetheless, this has to be solved. I strongly believe a simple pricing model that makes instant sense - is an important part of the UX. And a one-time payment like buying a physical product is the simplest of all.
But some software just due to the interconnected nature of it needs to be subscription based to cover the cost of running it before even getting into the ongoing development, bug fixes etc. In many cases I'd sooner pay for well maintained software than something under funded and as such not maintained. Subscriptions is opex vs capex meaning paying less than what a lot of software would be affordable to buy as a one off purchase at this point.
The subscription model benefits the consumer because it incentivizes use of the software. For example, suppose I want to learn web design. If I subscribe to Adobe Creative Cloud, I am now committed to use it because if I do not I am wasting money.
The subscription model benefits the consumer by reducing the up-front cost to use software. For example, Adobe Photoshop used to cost hundreds of dollars before use, and now it costs $20 (per month).
I suggest that we, as consumers, may need to reconcile with the cost of labor.
Is that really a benefit? I buy a hammer to meet my needs, not to incentivize myself to hammer things. Even in leisure I don't want to subscribe to my snowboard.
> I suggest that we, as consumers, may need to reconcile with the cost of labor.
Fair if there truly must be on going labor. But some things don't need to keep changing constantly. And if backward compatibility were taken more seriously then we wouldn't be wasting so much effort just keeping shit working.
Of course subscription models aren’t for every business. Of course customers would prefer to not have to subscribe. What’s your point?
If you’re saying that subscription is a bad decision for the products referenced in your article, I’m afraid that you’re almost definitely wrong. These big businesses have tested their pricing models and know that subscription maximizes LTV per prospective customer, which is ultimately what matters to them.
It's kind of comparing apples to oranges but as someone who has made courses for a while I've always thought about the idea of doing weekly screencasts instead. HN is one of the best places to ask this sort of question.
Reason being that I’m often unsure how deep I want to go in a subject, so putting up say $20/mo gives me the option of only spending $20 if during the first month I decide it’s not what I want.
If you want to see a very good (IMO) implementation of this model, check out Ray Wenderlich. Lots of free stuff to show you the style. Then $20/mo or $40/mo for “pro.”
Yeah that's a fair point. I boiled this down to paying per month or a 1 time purchase. It was coming from a more general angle where it could be content, a product / service or heated seats which when you think about it all have different tastes. Content and a service could be classified as different. For example I don't mind the idea of paying a one time fee for a photo editor but paying per month bothers me on principle because it doesn't feel justified, which is weird because in both cases you'd want or expect updates and if you're going down this rabbit hole of paying for 1 year's worth of updates this boils down to paying per month but on a different schedule with an added bonus of controlling if you want to pay for a major update or not.
Thanks for the feedback! Ray's site looks like he has hundreds of courses available, does your answer change if there's "only" ~30 standalone videos (not courses) on a specific topic with intent that more are being delivered every week? I guess the question there is at which point do you deem the catalogue large enough to pay? With one time course you at least know what you see is what you get with a possibility of there being more added over time in the form of updates.
I’m backing someone on Patreon who has maybe a dozen videos out, but it’s a hard subject and I’m determined to learn it and she releases about one new video a week. The production quality isn’t very high but you can see she puts a lot of work into it, planning and transcripts and stuff.
Teaching is hard!
So yeah my advice is market test by asking people you know who know your subject, then yes put it out there with some free content and some paid monthly. Or just try Patreon if the audience is big enough.
But for $100 get lifetime access to only that one purchased course?
Then if the consumer wants more they have the option to spend another $100 for a different course or add the $10/m subscription for other/new content.
I personally would benefit from this immensely in course style learning. I tend to browse lots of content until I find the right info. Then deeply consume the single topic slowly as I teach it to my team. I'm usually stuck paying monthly for something I use for a month then don't use until I begin the training a few months later then dormant again until the next training x months later.
An example.. pay for a Spotify/Netflix/etc monthly subscription but have the ability to purchase a cd/series/movie/book so that if you end your subscription you still have access to the purchased items. Essentially paying a monthly rate to peruse through material then purchasing to deeper dive/repeatedly use an item. The service might even make more money this way.
I guess it's a bit tricky to balance with "screencasts vs courses" which I suppose is a different conversation than a SAAS model or not, although these 2 are pretty tightly coupled. For example, you could have 100 isolated 5-15min screencast videos released once a week about let's say Flask or Rails or whatever topic you're interested in or a 5-10 hour course that covers a cohesive project from beginning to end using a specific tech.
The appeal of screencasts to me is you can make a video about anything around that topic, it's completely standalone where as a course is more like you pick the material, record it and that's it but then 8 months later something changes and you'd like to refactor something which could mean re-doing half the course because now you want to use esbuild instead of Webpack for your assets.
Full courses tend to be better at taking someone who is a beginner and guiding them to a finished solution and screencasts are good for anyone who wants to solve a very specific problem like "how do I do pagination with Flask". In theory you could have screencasts grouped together as a learning path to solve bigger problems tho so you can technically maybe get the best of both worlds with screencasts which is something I've always wondered about as someone who has made a couple of one time standalone courses.
E.g. if you sell an obscure format converter that I need once every year (but then I really need it) it should not be an subscription. I would gladly toss 20 Euros at the developer for something like this once. What I will not do is do any subscription, just because it takes up space in my mind perpetually.
I think they're great. Continual updates, ability to cancel when I stop getting value. Some services I sign up to just for a single project.
However, for guys like Netflix or for those companies that ship cooking ingredients and recipes to your door, I would happily be gouged by them for one or two on demand purchases.
Not sure if credit cards are in openbanking but that would be the core of it
The per-seat subscription model for a lot of these services doesn't make any sense when you own the hardware already, or can roll it out in the cloud and only pay for what you use with elastic models.
1) I refuse to subscribe to apps, and 2) I complain about it on the internet
Thanks for helping out with numero dos, friend.
Personally, I find most of these subscriptions offensive, so I gladly look forward to this future.
And people who see through it hate it because they realize how ridiculous the actual price is.
Or do you then perpetually own v2 after a year?
They broke the contract. The contract is the contract.
I think SaaS, and even many platform applications, are OK as subs.
"Buy once" platform app models are subs, anyway. It is unreasonable to expect a software developer to keep a package updated through many new operating systems. Some systems, like MS Windows (and, I suspect -but don't know for sure- Linux), do a great job of retrofitting, so older apps can often keep going, but most mobile systems won't. Apple is in the middle. It supports a ways back, but will deprecate features that older apps may require.
I used to buy the Adobe CS suite, yearly. Each year, I would get an upgrade, as the software would usually get new features that I wanted. I suspect that, eventually, the version I had, would stop working, but I never let it age that long. I probably could have gotten away with reupping every two, or even three, years.
I like the new sub model. I get access to every single Adobe app, at a lower price than what I paid for my yearly upgrades (but more than if I did it bi-yearly). This allows me to do something like install inDesign, if someone sends me an ID file. I don't want to keep the app around, otherwise.
SaaS is basically built around a "service," and "services," by definition, are subs. If I subscribe to a newspaper, that paper hits my doorstep every weekend, until I stop paying the bill. That's an ancient model, that has not changed; nor does it need to.
Hardware is another matter. I can see having a piece of hardware that could benefit from regular firmware updates, but I think it should keep running at spec, with a single firmware setup, despite new versions coming up.
I'm also pretty cynical about hardware that is sold with "lifetime upgrades." It's been my experience that "lifetime," is actually only a couple of years, before the firmware stops being upgraded. As long as the device keeps working with the last firmware, then that's basically what I paid for, anyway. If the device is "time-bombed," though, that's just evil.
If the device works, but uses a SaaS subscription, then I would think that the manufacturer needs to figure out how to keep supporting the device for as long as possible, and have some way to transition the device to “standalone” operation; especially if the company is going out of business, or phasing out support for the hardware. This would probably require legal backing, against corporate officers, personally, as corporations can get off the hook, fairly easily.
Also, I think we should do away with "lifetime" anything. I think the expected lifespan of stuff (like firmware updates and SaaS support) should be spelled out at purchase time, and legally enforced.
And calendars...smh. It would be great if MS and Google both followed some standard perfectly, but based on what I've seen from various calendar apps, they do not. Otherwise, the apps would not have such a hard time dealing with multiple calendars.
HN of all places is one I wouldn't think would assume software maintenance is easy. But, it's where I saw people complain about the Uber app size until an Uber engineer showed up and explained the many screens for payments alone.
Are there enough of them? Many services seems like they can only exist because many people forget to cancel their subscription.
I think of this illegitimate money as seed funding, by large companies, who certainly hope that we’ll reach the feature level of IBM’s products. Given they spend a million a year for IBM’s products, I think they’re doing good by seeding startups like us, even if we fail (which we won’t).
I have subscriptions that remain active despite not actively using the product: I could save money by unsubscribing and resubscribing but the money saved isn’t worth the effort to re-subscribe each time I want to use it.
The effort needed to un-/resubscribe is something that the service can directly control though.
Doesn't explain businesses that had been per-purchase for a long time and are now still switching to subscriptions though. (E.g. photoshop, jetbrains...)
That doesn't mean the rest of your statement, but if that happened then competition in a free market would take care of it. Perhaps you can start the next billion-dollar Adobe?
While it took a community outcry, I think Jetbrains now has the best subscription model, that’s a positive for both users and the company.
They could just let me keep the version I already have and block me from future updates. The way, they set it up right now, they are deliberately causing some disruption when unsubscribing.
It's called a Cash Cow[1] model—you make a one-time purchase, which allows you updates for the next year. At the end of the year, you can either purchase another year of updates, or enjoy the full-featured app you currently have.
The thing keeping me from subscriptions is the fact that if you decide you no longer want to pay, you no longer get access. This encourages devs to continue to ship great updates, while not gimping your software at the end of the payment term.
[1] https://drewmccormack.medium.com/a-cash-cow-is-on-the-agenda...
With cost of living crisis and such, soon enough though it won't be able to last. People are already cancelling one of the biggest main subscriptions they have (netflix).
Also I fear this is really changing society. Many years ago, as you got older you got into a better place in life because you had saved up and bought all the stuff you need and slowly aqquired good equipment and everything you need.
Now our lives are full of tech that needs to be replaced every couple of years, heck even now headphones have gone wireless, your headphones needs replacing every few years and now with more and more things being subscription, it's fine when your are young, but your not able to save so much as your constantly having to replace/buy new stuff, when your older what happens? You don't have the same stuff you would have built up in the past, you need to keep paying for it all.
Your grandfather's wheelbarrow didn't need replacing every 2 years but he also didn't have Netflix. You can easily have your grandfather's lifestyle by buying a future-proof wheelbarrow and cancelling your Netflix subscription.
Software is fixed cost to create and near-free to distribute. Sure there are tiny cloud costs for running things and maybe you need a couple engineers to fix bugs, but the subscription pricing model doesn’t fit this.
To use headphones as an example you can still go get a pair of wired Sony headphones that will have great sound and last for a decade for $50. I just did. (Or you can spend more and get even better.)
I've also bought $15 Chinese Bluetooth earbuds that were janky and dead in less than a year.
Sometimes the simple, older, reliable stuff is better.
You can build a desktop PC that will last you for a decade with occasionally upgrading components. Now you can do it with a Framework laptop too.
Personally I bought a nice i7 laptop about a decade ago and will only get around to retiring it this year, it stopped being my main workhorse several years ago but has been great as a secondary living room entertainment machine.
I don't need the latest greatest, I play a lot of retro and indie games and watch movies at picture qualities that video snobs would sneer at, but that gets back to whether you want to develop expensive tastes or not.
Not that life has fundamentally become unliveably expensive.
There are some places where cost of living really is a serious problem - homes, health care, education.
But a lot of this I feel is really about younger generations having voracious consumer appetites, like an absolutely off-the-charts, record-setting desire for luxury and status. A lot of it is driven by a heightened sense of needing to keep up, look good on Instagram etc. which is a whole other can of worms. Do you really need to keep up with the rat race, the Joneses, the latest fashions etc.? Maybe it's different now, but the Boomers went through their own version of this, they had their big hippie anti-materialism movement in the 60's (and then by the 80's they seemed to have forgotten all about it).
I think a big part of this is just how much better advertising has gotten, basically cementing consumer goods as required to the average person. Add on to that how good high quality laptops are specialized goods for those who spend their lives obsessed with tech (i.e. the framework laptop). If you walk into Walmart or BestBuy, your options will be severely limited to products which aren't built to last. I can't blame anyone for feeling confused when it comes to which products to buy.
Also, capitalism can’t help but lower the quality of products as a way to increase numbers sold. It’s inherent to the system. Companies would be insane to produce for example a phone that lasts 15 years, it would cut into their profit marges.
What this means for the endless, exponential "consumer" ideology is that it isn't sustainable in the long run. This should be blindingly obvious but for some reason many people weren't or aren't seeing it.
Only because you can't afford a subscription won't mean that people will stop trying to upsell. Instead you'll be constantly confronted with all the things you're supposedly missing out on, will be stuck with purposely annoying workflows and generally will feel like constantly using the shareware version of everything. That's not a future I personally look forward to.
more profitable is more likely to be viable in more future situations
This part is absolutely bonkers to me and absurd that we’ve accepted it.
I’m an amateur music producer. Many producers I know, even pros, use headphones that are years old, some even decades old. Most of the bestselling models haven’t changed at all in decades. You can use them for years and the only parts you need to replace are the ear cushions and cable. Most manufacturers even build them with replaceability in mind with detachable cups and cables.
The fact that so many companies are moving to the subscription model shows that it works better than others.
Want to run an ad? Prices have gone way up because you're the only one that's clinging to the old model. Want to pay premium to hire someone better? You can't, your competitor can because they have turned to subscriptions. In many cases your hand is forced.
Customers vote with their wallets and social shares. If you find a product that it a one time purchase, then you should share it, post about it since you will be rewarding the company, for they sure are not able to compete on customer acquisition.
Jetbrains is a great example, because with a steadily growing ecosystem of third party developer tools that they must integrate with, their maintenance cost is probably high and rising. We expect our IDE’s to support everything under the sun but balk at paying for the never-ending work needed to support that. Something’s gotta give in that equation.
However, there are a bazillion other applications -- password managers, note taking applications, Git clients, you name it, for which this is not true. I made a very niche-specific GUI application in 2010-2012 (a search application for Dutch treebanks), written with Qt. It runs on Windows, macOS, and Linux. It's effectively abandonware or just done (depending on your perspective). I have released updates since then to make sure it keeps running on the latest OS versions. It takes me, maybe 2-4 hours per year? (Typically replacing some deprecated Qt APIs and I there was one libxml2 API change.)
I think a lot of software companies just want to get on the gravy train. Usually, their yearly price is close to what a perpetual license used to cost. So if you successfully switch to a subscription model, you have much more income than before.
The primarily loser here is the user. You are poorer after an application switches to a subscription model. If a company goes bankrupt or decides to pull the plug, better hope that your data is not in a proprietary format (while I can still run some old WordStar in DOSBox and open old files).
Had a subscription model been used, those software might have benefited from 30 years worth of usability updates...or they might still be garbage, looking at SAP.
For example, Adobe is the largest SaaS by revenue:
https://www.mikesonders.com/largest-saas-companies/
— Model clearly works if you look at Abobe’s revenue per year since 2004:
https://www.statista.com/statistics/266399/revenue-of-adobe-...
— Here’s a detailed history of Abobe, if you’re interested in the SaaS part, just search for “SaaS” on the page:
Even if for some reason you didn't need all of this, IDE 1.0 would eventually stop getting updated and the bugs would stop getting fixed, so you would naturally need to update.
Considering people naturally want the latest and greatest, and devs hate maintaining legacy stuff, a subscription makes sense in this case.
> Considering people naturally want the latest and greatest
They often don't. Especially with updates, those are often far more in the interests of the developers than of the users. That's why so much development effort has gone into auto-updating schemes.
Remember how much effort Microsoft had to invest to get people off Windows XP. A large part of their userbase would have been perfectly fine with staying on XP for all eternity. It was Microsoft who wanted them to update to Vista, not the users.
Source: I run a SaaS business.
A related observation: we have unrealistic expectations of how cheap software should be. Software development is very expensive and has been becoming more expensive over the years, as system complexity grows and the pace of OS/platform updates increases. There are very few "mainstream" apps that can take advantage of economies of scale, and yet we still expect to be able to use hundreds of apps for cheap one-time payments. That leads to unsustainable business models and app churn.
Myself, I'd rather have a small number of expensive (subscription-based) good applications that are sustainably developed and maintained over many years.
"Greedy" as a criticism of a for-profit business makes about as much sense as "predatory" does as a criticism of a cat.
So a for-profit business is greedy by nature, so we need to regulate its natural impulses since it can’t control them itself, much like the cat.
If we assume that not all people (as it is people who drive these organisations) are greedy, we can also assume that greed is not baked into every profitable org.
Infinite support or updates and a one-time-payment is unrealistic, yeah, ruling out cloud-based SaaS. But for common desktop apps and on-prem stuff, that just isn't neccessary. Drop support at some (previously announced) point and the customer can decide if they want to upgrade. Adobe CS6 still runs fine.
Devs have it do easy now, that many are so abstracted away from DB, OS, network stack, persistence, that they literally have no idea how anything really works.
This is desired of course, devs today are in short supply, just like the bow vs the crossbow, years of practise turns into months.
But the point is, it is indeed far far far easier to deploy software today.
(why the 0 and now double u usage in place of w with auus?
I suspect auus, n0de, c0mposer dependant entities, such as auus,spend time defending their business model. I want honest discussion, not "omg, defend n0de" discussion, which latches on mention of such tech and pulls in the army)
I think systems nowadays are larger and more integrated, more complex.
Deployments sometimes are simpler, whilst other things instead are harder. Software will always be pushing the limits.
Maybe you don't want the comment to be found by search engines
In general, I do think software should be cheaper than ever. The main reason it isn't is the crazy pace of changes in platforms. I maintain a web app, which helps me keep my sanity, but I'm not even considering writing mobile apps: there is no way for me to keep up with the pace of changes and updates that vendors make there. It's just way too expensive.
That's the other extreme though.
There's a middle ground that http://reaper.fm/ uses. You buy the current x and x+1 versions. Then you pay for the license again for x+2, x+3 if you want to. The price is very reasonable and there's no subscription as such. If you're happy with the old major version, you can use it as long as it continues to work.
It is of course necessary to make ends meet and plenty of software shops do just fine with the business model of making a good product and charge for upgrades.
> You can stay on Windows XP to avoid that, would you?
People do. But realistically either you'd upgrade your computer since XP was sold and get a new license included, or just pay for the update once in almost 2 decades. I don't get the issue you're trying to point out.
You get all of whatever version you start on (Even if you start at x.99), plus the next, and then your license is done unless you renew it. So no matter what, I don't get updates after 6.99 unless I renew.
Most of what I do music-wise nowadays is making songs live in Ableton Live on Twitch, and I rarely bother to take them to a "produced" state, so what I have in the current Reaper is plenty. I probably won't upgrade, but I'll keep recommending it.
No it's not. This is very realistic: pay once for a license to use the software, and then you pay a maintenance fee every year to get the updates and new versions. You stop paying, you stop getting the updates, but whatever you have already still works. There's no shortage of examples but I'll give a shout-out to one of my favorite software products, PRTG: https://shop.paessler.com/shop/prtg/new/?preselected_license...
I think the model's seen as being more lucrative, so even businesses that don't inherently need it so much try to find a way to adopt it.
We can pretend it will work for a while, but I do not think this is realistic.
Support is not something you can ignore: people will request support, post negative reviews and opinions, and you will need to deal with that.
My point is that we should all stop pretending and just accept that apps cannot be used without regular maintenance anymore.
With a one-off purchase, you can sell the same thing to a customer multiple times, you can sell upgrades, and you "magically" remove churn.
You own a SaaS, how long do your customers stay customers? If it's 8 months, sell a one-off purchase for the cost of 16 months. Bam, you've made more than you ever would from an average customer, and you don't have to hunt them down and try to get them to stay a customer. You can just focus on building an awesome product and not worry about churn at all. In a year or so, think about a new feature or two that increases the value of your product, sell that new feature (eg, discounted) to existing customers and increase the price for new purchases.
One of my ideas is that we should package manage solutions to problems at a level higher than just code and subscribe to them. We all depend on BSD sockets due to history. BSD sockets Just Works™ and people don't really evolve the BSD socket API over time. If only the rest of the software stack was as feature complete as BSD sockets.
Imagine a labour market that was also a package manager.
When library "xyz" upgrades from version 1.2.0 to 1.3.0 there's an interface change that breaks everybody. If there's 1,000 dependents of "xyz" and it takes 1 hour to upgrade and 1 hour to pass all QA tests and get into production, then that upgrade takes 1,000 man hours + 1,000 hours automated testing.
If we don't depend on library "xyz" throughout our codebase, we reduce the number of callsites to change. If we use a facade, they're all in one place. If we use a Service Provider Interface, we isolate ourselves even more and add flexibility of implementation.
If our facade or SPI is in escrow on a labour market, someone can fix it for us for a cost of their time. Ideally the software maintainer fixes it so they don't break so many people.
Tying the ability to run with a subscription model means we can't use it for anything business critical (as per legal, regulatory, or just common sense reasons).
It’s the same story with raising funds. If you need capital you can raise substantially more for substantially less if you have recurring revenue.
It would be more valuable for a business owner to take a $1M non-recurring revenue business and convert it into a $500k recurring revenue business, stabilize, and then sell.
If you think that’s asinine… well, you’re right. Something is deeply wrong with MBA and finance culture in America. We have truly lost our minds when it comes to valuations.
It makes logical sense to me that recurring revenue is more valuable than non-recurring revenue.
And I find the whole thing disturbingly ridiculous. Your examples are pretty divorced from reality. What’s the fundamental difference between consistent annual sales and recurring revenue? Of course in your example the recurring revenue would be worth more, but that’s not an example from reality.
At the end of the day there is finite consumer spending. Companies aren’t really making more money by shifting to recurring revenue. They’re just increasing their value because finance bros say it’s the way to increase your value.