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Licensing versus the subscription model

Sam Carigliano, CEO and co-founder of cloud based structural engineering software provider SkyCiv explains what the subscription model means for engineers.

 In July last year, industry giant Unilever bought e-commerce start-up Dollar Shave Club for one billion dollars. The success of the shaving subscription service, and how it is now being taken seriously by industry leaders, shows how subscription services are now becoming the most popular model of commerce.

In many parts of the engineering industry, software has always been based on a licensing model. Companies tend to spend anywhere between 5000 to 40,000 dollars on software packages, which work using a licensing key. On top of this, companies will pay regular fees of around $800 a year to continue support services.

While this may be within the financial means of large engineering firms, for engineers working for smaller firms, working on projects, or for students, the initial outlay costs are simply not manageable. This is where the regular price of a subscription service may help firms to better manage their budgets and avoid big expenses outright.

Many companies now also offer more of a pick and mix approach to consumer products from insurance to holidays, which also extends to subscription-based engineering software services. SkyCiv’s structural engineering software works on a modular approach, where engineers pick a base package, then add on the modules that they need. This saves cash-strapped companies paying for features that they don’t intend to use.

As consumers, we now expect much more regular updates to the technology we use. Long gone are the days when the only way to use your engineering software package was to install it onto a suite of desktop computers and only update it once a year, if that.

In contrast, it seems like there’s an update for the apps on our phone almost every day. Subscription models also have the advantage of allowing customers to receive far more regular updates than the licensing model.

Rather than engineers having to spend time downloading and installing software, those using subscription based software benefit from updates that are rolled out regularly, with no extra cost to users. This is particularly useful in engineering disciplines where there are regular changes to regulations.

For example, SkyCiv’s structural engineering software was recently updated to include the American Institute of Steel Construction’s (AISC) 360-10 regulations for steel buildings. For users, the software automatically updated, meaning they could be sure that their current designs were still in accordance with the governing body’s standards.

Software subscription services, based on the cloud, are also seen to be much more relevant to the modern ways of working. With approximately 20 per cent of the world’s workforce working from home, this allows engineers to no longer be chained to their office desk. Software can be used on a variety of devices and operating systems, meaning that no matter where the engineer is in the world, or if they are not on their usual device, they can still login and work on their designs.

While licensing models are still very popular in the engineering industry among big firms, Microsoft moved to subscription models for its Office software in 2013, proving its importance in the consumer software industry.

If companies like Unilever are looking at new, innovative ways of bringing subscription services to their products, then perhaps it’s time for engineering companies to take the leap and reap the benefits of subscription.

CTS The industrialisation of IT
CTS - Industrialisation of IT
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