Not all cloud offerings are subscription based



One complaint I often receive from business owners who are still skeptical of the cloud is that they don't want to pay a monthly fee for something that they could buy offline and only pay once for (albeit at very high cost of entry).

Now, one could always argue with these people that they eventually will end up purchasing this product again once the vendor stops supporting it. This could be many years in the future if you are talking about a desktop suite like Microsoft Windows XP (which is due to finally lose support patches in 2014) or it could be a boxed accounting product that will stop receiving updates in 12-24 months in order to drive you towards purchasing the next iteration.

That practice is known as either planned, built-in or forced obsolescence but it ultimately means the same thing – they are making you pay full price for a very similar product to the one that you bought in the past. Sure, it will have minor improvements over the version that you currently own, but it is rare that these are things that could not have been added by patching.

Subscription based charges have become the norm in the cloud industry thanks to companies like Saleforce and Netsuite and many traditional software companies like Sage have now shifted their focus towards a subscription-only model. Adobe is the latest high profile tech company to do this with Photoshop, which can no longer be bought outright. Users must now sign up to a 12 month contract and at the end of that period they still won't own the software.

Understandably this shift is not going over particularly well with the general purchasing public who always enjoy the feeling of owning something tangible, even if it is only software. The concept of ownership is and always will be an important factor in purchasing decisions.

Vendors say that they need to make this shift because it allows them to focus on making the best product possible and they need the monthly subscription fee to justify the cost of implementing new features over a much shorter timescale. It is also to combat the ever present threat of piracy.

But, even as someone who operates exclusively in the Cloud environment, I feel it is still important wherever possible to give customers the option to own the software they are purchasing rather than hooking them into a subscription. That's why many of the apps my company sells can be paid for once and then used forever.

I'm pleased to say we are not alone in doing this and there are still a (small) number of similar cloud apps that do this, especially in places like the Apple App store.

Stefan Töpfer is the CEO of - a leading business cloud infrastructure provider. The views and opinions expressed are his and are based on over two decades of personal experience in the internet industry as a serial entrepreneur, editor of The Small Business Blog, mentor and angel investor. Double-underlined links have been added by NASDAQ and are not endorsed by the author.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: News Headlines , Business

Referenced Stocks: AAPL , ADBE , CRM , MSFT , N

Stefan Topfer

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