Questions

Should we convert our perpetual license holders to SaaS?

We have a fairly large user base of license key holders for our desktop software. Users have paid a one-time fee of $30. To move the key to another computer/system, our users need to reset the key (we allow max 3 resets). The key can only reside in full licensed mode on one system at a time. We have full control over the license keys on our server. We are thinking of offering a subscription whereby users can do unlimited license key resets. We may include additional perks such as giving them additional license keys, free software upgrades etc - good or bad idea?

3answers

SaaS is the way everyone seems to be going these days, as it is a huge revenue producer for software vendors. Why make $50 once when you can instead milk someone for $10/month for life? As a holder of multiple desktop licenses for products like Quickbooks, Photoshop, etc I can say that I HATE when I am forced to go to a subscription-based model unless it comes with some very good perks. Quickbooks is using pretty brutal tactics to get everyone to switch, including disabling real-time sync with bank accounts, etc. For this reason I will probably switch to a different software vendor in the very near future.

If you do decide to go to an SaaS model, make sure that you give the users a very good reason to switch and ideally give them a choice, don't force it on them. Free upgrades are petty much a given, or else what are they paying for?


Answered 5 years ago

Someone who purchases a perpetual license at such a low cost is likely to balk at being forced into a SaaS model.

Split test two licensing models and compare the conversion rate for a SaaS model vs Perpetual license.
Test different variables, price, subscription duration.

You might consider moving from a license per computer to a per user license as this is the very common type of Saas licensing model.

Once you have a data that backs up a move to a SaaS model, then simply discontinue offering the perpetual license. As your old customers use up their license key resets transition them to the SaaS model.

You will definitely need to include free software upgrades in the SaaS model and limiting the number of key resets would generate canceled subscriptions.


Answered 5 years ago

With a low price point, I think you might have trouble converting them to a subscription. Like you mentioned, I think you need to offer a perk or repackage the product with a new name and a few more hooks (features, better value) to get them to convert to a new pricing model which would be more expensive for them in the long run.


Answered 5 years ago

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