Microsoft Perpetual License or Software Subscription?

Differences between Microsoft perpetual license or software subscription - Microsoft 365 Licensing

There’s been an ongoing debate: Perpetual Licensing vs. Software Subscription. If you’re struggling to decide whether one is better than the other, here we’ll help you clear your doubts.

In order to decide which path to take, first we need to know what differentiates one from another.

The main difference between these two is the payment pace. A perpetual software license is paid up-front in one sum, you can optionally choose to pay for Software Assurance which adds extra benefits to your software. On the other hand, Software Subscriptions are priced on a monthly, or sometimes a yearly basis. It’s an ongoing subscription that covers maintenance, upgrades, and technical support.

However, this is not the only difference between them, so, let’s get into a more detailed comparison.

Microsoft Subscription model

Parting from the core difference mentioned above, with the Subscription model customers pay a recurring fee to have access to the software, ongoing support, and updates. It also opens access to the paid product for more users. Nevertheless, if the user stops paying the subscription fee, their software access is cut off.

In summary, the customer is paying for a constantly updated, innovative product.

Microsoft Perpetual License model

We can consider this model a veteran, since it started in the early days of software. Back then, companies couldn’t handle the costs a Subscription brought, so Perpetual Licenses were the way to go.

Microsoft Perpetual license allows the customer to have indefinite access to the software. If you fail to renew your licensing support contract, you will still be able to use the product, since you made an up-front full payment for it.

Now let’s talk about updates and support. Under a Perpetual License contract, you will get periodic updates, which means you might have to wait longer to get the latest version of your product.

IT infrastructure, maintenance and admin staff are not part of the up-front payment of the software, these are paid yearly under a ’maintenance fee’.

Benefits:

Software Subscription

  • Periodic payments
  • Constant upgrades
  • Customer service
  • IT infrastructure provided
  • Maintenance

Perpetual licensing

  • Indefinite access to the software
  • Licenses may be transferred
  • Can run offline systems
  • Lower total cost of ownership through time

Having talked about the differences between them, and the benefits each model has, if you are still questioning which one’s better, here’s why: The truth is there is no right or wrong answer.

While Subscriptions have taken over the market in the past year, some organizations are still opting for Perpetual Licenses. This is because this decision should be based on your company’s needs.

Subscriptions have a lower initial price, but their cost is higher over time and the service is cut off if you stop paying. Whereas Perpetual Licenses have a higher up-front cost, that results beneficial over time, and your software usage never expires.

There is no difference in the functionality of the product, no matter which model you choose. Knowing this, understanding your organization’s needs and where it stands, we are sure you’ll be able to make the right choice. 

365 Cloud Store is a Microsoft Cloud Solution Provider (CSP) in Austin, Texas, serving U.S. businesses nationwide. As a trusted Microsoft CSP for American companies, we specialize in Microsoft licensing, support, and cost optimization tailored to U.S. regulations and time zones. If you’re looking for a reliable Microsoft CSP partner in the United States, we’re here to help you simplify management and maximize savings.

Regardless of which path you decide to take, we’re here to help you reduce your licensing complexity. Buy smart today with 365 Cloud Store, contact us. 

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Lucy

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