The upgrade-train model is over for a lot of software out there. Those of us who want good desktop software should be begging our favorites (I'm looking at you, JetBrains) to charge on a subscription basis.
I'm with you, man, I'm cheap too. But that's the reality of todays software.
I think it is a large problem, and we are seeing the manifestations of it now.
Time will tell, but I'm sure not gonna work on one-time charge software, nor would I recommend it to anyone. I'll work on free open source stuff, financed by work on whatever recurring models I can figure out.
Who wants to maintain an old code base when they could spend ten weeks trekking in New Zealand[2] and then hunker down for the Great Rewrite That Fixes All The Problems?
(Not that I blame Odgaard; in fact, as an ST2 user this is my greatest fear about that product--selling thousands and thousands of copies at $60 is an extremely viable level of revenue for a one-man shop.)
[1]: http://blog.macromates.com/2006/year-in-review/ [2]: http://blog.macromates.com/2006/20-will-require-leopard/
A paid version 2 though produces a similar windfall again, rather than diminishing returns.
Marginal utility. The first million is worth a lot more than the second.
I wonder if PixelMator is on a similar trajectory after Apple has featured them in nearly every possible spot on the Mac App Store.
Why can't you give me fixes for the version I purchased and then sell the next major version ?
Years ago it was the same thing with Trillian IM. While I happily paid Reaper (a DAW) that gives me two major versions.
I think the SaaS model applied to desktop software would run into some problems. I think people would react with hostility if their desktop software stopped working once they stopped paying a license fee, even though they may very well accept this model for browser-based apps.
I think the sparrow guys charged too little for their email client, personally. People will pay for beautiful and quality, productivity tools.
It's unfortunate, but the desktop model just doesn't pencil out in many places in todays world. That means that stuff will end up in the cloud and on the web, not because that's where it can be best implemented (I far prefer a good thick client over a good web app) but rather because that's where the economics force it. And users will end up being held ransom by a cloud service anyway.
It's a funny economics problem.
The economics of the upgrade-train desktop model are bad and getting worse, and the market will supply less of that. I may be proposing something not inherently appealing to you, but I think increasingly that's where people smart enough to build great software will focus their efforts.
iCloud/Dropbox has really set the expectation that syncing should be free.
Right now they have customers who do stuff like buy CS Design licenses for every computer in their organization because a few people wanted it. If customers like that jump on SaaS options while normal folks do the math (hmm after eighteen months am I ahead or not?) it's a net loss.
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These SaaS options aren't necessarily the net loss you describe.
I don't mean this to sound like an ad for Adobe's subscription model, but as someone who's used a lot of their products for over a decade, it's hands-down the best way for companies to get access.
In Adobe's case, per-app pricing is really there to set value for the Creative Suite bundles, which in turn set the value for subscriptions.
Let's say I need Photoshop. I have 3 primary options:
- Buy Photoshop CS6 for $700 right now. It's on a 2 year release cycle, and was recently updated, so that's a solid 2 years of guilt-free use until the next rev.
- Buy a CS bundle - eg Design & Web Premium for $1,900. Includes Photoshop Extended, Illustrator, InDesign, Acrobat, Flash, and Fireworks.
- Subscribe at $50/mo for 1 year ($75/mo w/ no commitment). Gets everything above, plus Premiere Pro, After Effects, et al.
If I buy the bundle, that's a $4150 value for a mere $1200 more than Photoshop by itself. This is why the bundles have always sold so well.
If I subscribe for 2 years, it's $500 more than Photoshop by itself, and $700 cheaper than buying a standard CS bundle. Also, I get the latest version of every Adobe tool for the duration, so if different people in the org have different needs I don't need to care.
Meanwhile all the small shops who could not afford to buy licenses just to equip the 3 freelancers for a month will suddenly be able to justify the small cost of a month's subscription. I almost expect them to roll it into each job's billings, whereas previously they would either use a hooky copy or suffer the pain of juggling licenses and old software.
There are a lot of small shops using hooky Adobe software.
Under the subscription model, don't you think the software you're subscribing for will end up like IE6, left to stagnate because there's no incentive to spend developer time on it?
Both business models can work, and both business models can fail. I haven't seen any evidence that SaaS is immune to competitive pricing, which is the issue being described in the post.
Developers publish feature lists for an upgrade cycle, users vote with their dollars, different features can be funded, etc etc? There are a couple of open source projects (like PostGIS) that have similar programs...
This is not a long term solution. The only viable solution was to reduce burn rate as close to zero as possible. This means producing a new software.