The Case for Owning Your Software: Breaking Free from Subscriptions

In recent years, the software industry has undergone a significant transformation. The traditional model of purchasing software outright has been largely supplanted by subscription-based services, commonly known as Software as a Service (SaaS). This shift has changed how businesses and individuals access and use software tools, from productivity suites to specialized industry applications.

We would like to make the case for owning your software outright, breaking free from the subscription treadmill that has become increasingly prevalent in today’s digital landscape.

Although there are a number of software distribution models, let’s consider a 2×2 matrix in which the payment model (subscription vs. one-time purchase) is compared with the hosting model (SaaS vs. self-hosted):

The SaaS one-time payment, often referred to as LTD (Lifetime Deal), is not a sustainable business model long term. It has its place in some specific circumstances (such as for example early stage market fit research) and will not be covered. The self-hosted subscription is relatively rare but can be found for some products in large enterprise offerings (e.g., GitLab, Jira). This case will not be covered either.

SaaS Subscription Model

The Software as a Service (SaaS) subscription model has become increasingly prevalent in recent years, offering many advantages that have contributed to its widespread adoption. However, it is important to note that some of these benefits primarily serve the providers.

Advantages

Steady revenue stream for providers

This primarily benefits the software providers’ financial interests, which may not always align with providing the best value for the customers. However, it is worth understanding as it does indirectly impact the user experience:

• Predictable income: Subscription models provide companies with a steady, recurring revenue stream, allowing for more stable financial planning.
• Increased valuation: Companies with subscription models often enjoy higher valuations due to the predictability of their income.
• Investment in development: A steady revenue stream can allow companies to invest more consistently in product development and innovation.

Regular updates and support for customers

• Continuous improvement: SaaS models typically offer frequent updates, ensuring customers always have access to the latest features and improvements. This is not entirely altruistic, as the providers do so in part to increase perceived value, and reduce churn.
• Automatic updates: Updates are usually applied automatically, reducing the burden on users to upgrade and manage software versions. Providers can quickly push out bug fixes and security updates to all users, enhancing the overall stability and security of the software.
• Ongoing support: Subscription models often include customer support as part of the package, providing assistance when needed.

Lower initial cost, making software more accessible

This aspect can be significant for both individual users and businesses:

• Reduced upfront investment: Instead of a larger one-time purchase, users can access software with a much lower initial payment.
• Improved cash flow management: The spread-out costs can be easier to manage, especially for entities with limited budgets.
• Access to enterprise-grade software: Subscription models allow smaller businesses and individuals to access high-quality software that might be otherwise prohibitively expensive.
• Tiered Pricing: Most SaaS solutions offer tiered pricing based on value metrics (feature set, usage volumes, etc.) relevant to the specific niche. The counter is that accessing premium features can quickly lead to premium pricing. Note that tiered pricing is not unique to SaaS as many one-time purchase software also offer similar options (e.g., Home vs. Pro vs. Enterprise).

Flexibility and scalability

SaaS solutions often provide flexibility and scalability that can benefit users in various ways:

• Scalability: Users can often start with basic plans and scale up as their needs grow, or down based on usage, without high upfront costs.
• Multi-device access: Many SaaS solutions offer the ability to access the software from multiple devices or locations, enhancing flexibility. Although this is a function of the software delivery model (e.g., web), and not unique to SaaS.
• Rapid deployment: SaaS solutions can often be implemented quickly, without the need for installations or hardware setup.

While the advantages of the SaaS subscription model have contributed to its popularity, it is important to weigh them against the potential drawbacks and consider whether this model aligns with your long-term needs and preferences. The benefits of regular updates, lower initial costs, and flexibility are appealing, but they come with trade-offs in terms of ongoing costs, data control, and potential vendor lock-in, which we will explore in the next section.

Disadvantages

What are some of the drawbacks of the SaaS subscription model that users should consider?

Higher long-term costs for customers

• Over time, the cumulative cost of subscriptions can greatly exceed the price of a one-time purchase.
• Users may end up paying for features or capacity they do not fully use.
• The convenience of lower upfront costs can obscure the total expense over the software’s lifetime.

Unappealing recurring payments for some customers

• The psychological burden of ongoing payments can be stressful for some users.
• Budgeting becomes more complex with multiple recurring expenses.
• Users may feel a constant pressure to justify the ongoing expense.

Unpredictable price increases

• Providers can increase prices, sometimes substantially, with limited notice.
• Users may be forced to accept higher costs, face the disruption of switching to alternative solutions, or lose access to that capability altogether.
• Long-term financial planning becomes challenging due to potential price fluctuations.

Dependency on provider continuity

• Access to software and data is contingent on the provider’s ongoing operations.
• If a provider ceases operations or discontinues a product, users may lose access to critical tools and data.
• Users are vulnerable to changes in the provider’s business model or strategic direction.
• One is highly dependent on the provider for backups, disaster recovery, and business continuity of the function provided.

Vendor lock-in

• Switching costs and data migration challenges can make it difficult to change providers. This is particularly true for ‘sticky’ products like email marketing automation platforms.
• Users may become overly reliant on a specific provider’s ecosystem or features.
• The risk of lock-in can reduce bargaining power and limit future flexibility.

High switching costs and data history importance

• Migrating data and workflows to a new system can be time-consuming and expensive if at all possible.
• Historical data may be lost or difficult to transfer when switching providers.
• The disruption caused by switching can have a big impact on productivity and business continuity.

The SaaS model offers many advantages, but it also comes with many drawbacks. These include higher long-term expenses, unappealing constant recurring payments, dependency on service providers, potential vendor lock-in, and more. In light of these challenges, there is a resurgence of interest in the concept of actual software ownership.

Self-Hosted Buy-Once Model

Owning software outright through a one-time purchase model presents an appealing alternative. It offers the potential for long-term cost savings, greater control over one’s digital tools, and freedom from the ongoing financial commitments associated with subscriptions. This approach aligns with a broader philosophical stance that values ownership and autonomy in an increasingly rental-based economy.

Let’s explore the advantages and disadvantages of the self-hosted buy-once model in a bit more detail.

Advantages of One-Time Purchases

Long-term cost savings

One of the most important benefits of purchasing software outright is the potential for substantial long-term savings. Even though the initial investment may be higher, users avoid the accumulating costs of ongoing subscriptions. Over time, this single purchase can prove to be far more economical.

Better control and ownership of your tools

When you own your software, you gain better control over your digital tools. This ownership allows for greater flexibility in how you use, possibly modify (if the source code is provided), and integrate the software into your workflow as you see fit.

Data security and privacy advantages

Self-hosted solutions offer superior control over data security and privacy. By maintaining your software and data on your own servers, you eliminate the risks associated with entrusting sensitive information to third-party providers. This control is particularly crucial for businesses handling confidential client data or operating in industries with strict regulatory requirements.

Independence from provider policies and operations

Owning your software insulates you from the whims of service providers. You are not affected by changes in their terms of service, pricing structures, or business operations. This independence ensures continuity in your operations, free from the disruptions that can occur when a SaaS provider alters its offerings or, in extreme cases, ceases operations.

Predictable budgeting and financial planning

The one-time purchase model allows for more accurate and predictable budgeting. Once the software is purchased, there are no recurring costs that could vary from month to month to factor into your financial planning. It also minimizes the administrative burden of managing multiple vendor relationships and contracts.

No risk of losing access due to missed payments

When you own the software, there is no risk of sudden service interruption due to a missed payment or billing issue. This stability and reliability are crucial for businesses that depend heavily on their software tools for daily operations. It eliminates the stress and potential disruption that can be associated with subscription-based access.

Ability to use the software indefinitely

With a perpetual software license, you can continue to use the software for as long as it remains compatible with your systems. This longevity can be particularly advantageous for specialized software that does not require frequent updates or for businesses that prefer stability over having the latest features.

Flexible approach to updates and support

In a buy-once model, updates and support are often optional purchases. This flexibility allows users to decide when and if they need to invest in newer versions or additional support. Users are not forced into automatic updates or ongoing support contracts, which can be unnecessary for stable, mature, well-functioning software. This approach puts the power of choice back into the hands of the consumer, allowing for more targeted and cost-effective software maintenance.

The self-hosted buy-once model presents a compelling alternative to subscription-based services. It empowers users with greater control, almost certain cost savings in the long run, and the flexibility to manage their software assets according to their specific needs and preferences.

Disadvantages of the Self-Hosted Buy-Once Model

Although the self-hosted buy-once model has many advantages, one needs to consider its potential challenges.

High initial cost

The main barrier to buying software outright is often the higher upfront cost compared to subscription models that spread payments over time. This can be challenging for small businesses, startups, solopreneurs, or individuals with limited capital.

Responsibility for infrastructure and maintenance

Self-hosting software means taking on the responsibility for the infrastructure needed to run it. This includes providing and maintaining servers (whether on-premises or cloud-based), and managing patches, upgrades, and security. These tasks may require some technical expertise depending on the type of software and can add hidden costs in terms of time and resources. This can be mitigated by using managed hosting services, but this will add to the costs.

Increased responsibility for data backup and disaster recovery

As a corollary to the above point, the responsibility for data backup and disaster recovery falls entirely on the user. This requires additional planning, resources, and potentially specialized knowledge to ensure data safety and business continuity.

While this increased responsibility can be challenging, it also provides greater control over data management practices. As popularized by Uncle Ben of Spider-Man fame, “With great power comes great responsibility” – self-hosting offers more power over your data, but also demands more attention to its security and integrity. Again, leveraging modern cloud services can mitigate this risk.

Limited access to immediate updates

Unlike SaaS models that often provide automatic software updates, self-hosted solutions may require manual updates. Users might need to wait longer for new features or security patches, and the update process itself can be more complex and time-consuming.

Manual, intentional updates may not necessarily be a bad thing (see the CrowdStrike meltdown of 2024). The ability to control when and how updates are applied can prevent unexpected disruptions and allow for thorough testing before deployment.

Potential for technological obsolescence

As technology rapidly evolves, there is a risk that purchased software may become outdated or incompatible with newer systems. Without updates, users might find themselves needing to repurchase newer versions to maintain compatibility or access new features. This is where the software vendor’s life cycle management strategy can become important.

Compliance considerations

For businesses in regulated industries, maintaining compliance with data protection and privacy laws can require additional effort with self-hosted solutions. It requires staying up-to-date with changing regulations and ensuring that all aspects of the software and its hosting environment meet compliance standards. It is worth noting that this level of control can be advantageous, as it allows businesses to tailor their compliance measures precisely to their needs.

Also, strict compliance requirements may actually limit the viability of many SaaS options, making self-hosted solutions the preferred if not the only choice in some industries or jurisdictions.

The Philosophical Case for Software Ownership

In addition to the practical considerations outlined above, there is a deeper, philosophical dimension to the choice between subscriptions and owning your software—one that speaks to our values and our relationship with the digital tools we rely on.

The shift towards subscription-based models in software and beyond is part of a broader societal trend that has been dubbed the “rental economy” or “subscription society.” There is a growing philosophical argument for the value of ownership, particularly in the digital realm.

Resisting the “you will own nothing and be happy” narrative

In recent years, a controversial phrase has gained traction: “You will own nothing and you will be happy.” This concept, often attributed to discussions about future economic models, has sparked debate about the long-term implications of a shift away from ownership.

Although the push towards subscription models in software should not necessarily be seen as part of this larger trend, many individuals and businesses are beginning to question whether this model truly serves their best interests. Owning software, like owning other assets, provides a sense of security and autonomy that renting or subscribing cannot match.

By choosing to own software, users are actively resisting a future where they are entirely dependent on service providers for the tools they need to work, create, and communicate. This resistance is not merely about software; it is about maintaining control over the means of production and communication in an increasingly digital world.

Empowerment through ownership and control

Ownership of software empowers users in several ways:

1. Decision-making autonomy: Owners can decide when and if to upgrade, how to use the software, and how to integrate it with other tools without being constrained by a provider’s decisions.
2. Customization and adaptation: Many purchased software products can be modified or customized to suit specific needs, providing a level of flexibility that centralized SaaS subscription services cannot offer. The Open Source software movement is at the forefront of this spectrum of flexibility.
3. Data sovereignty: When you own and host your software, you have greater control over your data, its storage, and its use. “Use” being the key word here, as otherwise, the data could still be yours, but its use is dictated by the software provider.

Resistance to subscription fatigue

Ownership presents a clear alternative to the growing problem of subscription fatigue. By owning software, users can escape the cognitive burden of managing multiple subscriptions, the stress of recurring payments, and the constant evaluation of whether each subscription is providing sufficient value.

This resistance is not just about avoiding inconvenience; it is about reclaiming mental bandwidth and reducing the cognitive load associated with the modern subscription economy. Ownership simplifies one’s digital life, allowing for greater focus on the work or creativity the software is meant to enable.

The need is so high, there are now commercial services geared towards tracking, managing, and automatically cancelling subscriptions that are no longer needed or used. Ironically, some of these services are themselves subscription-based.

Reclaiming ownership in a rental society

As our society moves increasingly towards rental and subscription models across various sectors, from housing to transportation to entertainment (streaming, gaming, etc.), the act of owning software becomes a form of countercultural statement. It is a way of asserting the value of ownership in a world that seems to increasingly push against it.

Owning software is about more than just the software itself; it is about reclaiming a sense of stability and permanence in a changing landscape. It is an investment in self-reliance and a hedge against the uncertainties of a subscription-based future.

In addition, ownership can be seen as a form of digital sovereignty. In a world where data is increasingly valuable and personal privacy is under threat, owning the tools that handle your data becomes an act of self-determination and protection.

The philosophical case for software ownership is rooted in concepts of autonomy, empowerment, and resistance to an all-encompassing rental economy. By choosing to own software, individuals and companies are not just making a practical decision about how they access digital tools that can be critical to their operations; they are making a statement about the kind of digital future they want to create and inhabit. It is a future where users have greater control, where the cognitive burden of constant subscription management is reduced, and where ownership holds value.

Considerations When Choosing to Buy Software Outright

The benefits of owning software are numerous, as outlined above. As this approach often entails a higher initial investment compared to subscription models, it should require a more careful and thoughtful assessment before making a purchase decision.

By conducting a detailed evaluation, individuals and organizations can ensure that the software they buy aligns with their long-term needs and provides them with value commensurate if not above and beyond with the investment.

Objective Approach to Software Purchasing Decisions

It is important to objectively evaluate any software purchase; here are some steps to help you make the best choice for your situation:

1. Needs Assessment:
   • Clearly define your requirements, both current and anticipated future needs.
   • Identify must-have features versus nice-to-have features.
   • Consider the scale of your operations and potential growth.
2. Market Research:
   • Explore all available options, including both subscription-based SaaS and one-time purchase solutions.
   • Compare features, pricing models, and total cost of ownership over your expected usage period.
   • Read user reviews and seek recommendations from peers in your industry.
3. Trial Period:
   • Whenever possible, take advantage of free trials or demo versions.
   • Test the software in your actual work environment to assess its fit and performance.
4. Stakeholder Input:
   • Involve key users and decision-makers in the evaluation process.
   • Consider the impact on different departments or team members.
5. Technical Compatibility:
   • Ensure the software is compatible with your existing systems and infrastructure.
   • Assess the technical resources required for implementation and maintenance, especially for self-hosted solutions.
6. Financial Analysis:
   • Conduct a thorough cost-benefit analysis, considering both short-term and long-term financial implications.
7. Exit Strategy:
   • Consider the process and costs associated with switching to a different solution in the future.
   • Understand data portability and export options.
8. Decision Matrix:
   • Create a weighted decision matrix that includes all crucial factors (cost, features, support, etc.).
   • Use this to objectively compare different options.

The above is not exhaustive, but it should provide a good starting point.

This article advocates for one-time payment software solutions, but the best solution varies depending on individual circumstances. The steps outlined above should help in making an informed decision that aligns with your needs.

Conclusion

As we hope to have demonstrated throughout this article, the decision to own software through one-time purchases presents a compelling alternative to the subscription model, offering numerous benefits such as

• long-term cost savings,
• greater control and autonomy,
• enhanced data security and privacy,
• stability and predictability,
• simplification of digital life,
• resistance to subscription fatigue, and
• alignment with broader values of digital sovereignty and resistance to the “rental economy” narrative.

Call to action: Evaluate your software needs and consider breaking free from the subscription treadmill

We encourage you to look beyond the sometimes immediate convenience of subscriptions and consider the long-term benefits of ownership. As you move forward, we would encourage you to take the following steps:

1. Audit your current software subscriptions: Evaluate which tools you truly need and use regularly.
2. Assess your long-term needs: Consider your future requirements and how they align with the benefits of software ownership.
3. Explore ownership options: Research one-time purchase alternatives for your most critical and frequently used tools.
4. Conduct a cost-benefit analysis: Compare the long-term costs of subscriptions versus one-time purchases for your specific use case.
5. Start small: If you are hesitant, begin by converting one or two key subscriptions to owned software and evaluate the impact.
6. Embrace the freedom: Experience the liberation that comes from breaking free from the subscription treadmill.

The goal is not to necessarily eliminate all subscriptions, but to find the right balance that serves your needs while maximizing control, minimizing costs, reducing the cognitive burden of subscriptions, and embracing the freedom of ownership.

By carefully considering the option of software ownership, you are taking a step towards a more empowered approach to your digital tools. Whether you are an individual seeking to simplify your digital life or a business looking to optimize operations and costs, the path of software ownership offers a compelling alternative to the subscription status quo.

Take control of your digital destiny. Break free from subscriptions. Embrace the power of software ownership.

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