Buy or Rent? That’s an oft heard question especially in meetings with accounting people. For years that topic only came up when capital goods like machinery, equipment, vehicles and buildings were evaluated. Fast forward to 2015 and software licensing is now in that conversation. And, importantly, Autodesk is a big part of it. In fact, this question is important enough for Autodesk to offer rebates of up to $1250 this quarter for those who are making a buy or rent decision.
Earlier this year Autodesk announced that on February 1, 2016 their standalone software titles like AutoCAD and Inventor would be available only by way of Desktop Subscription (rental). And just this week Autodesk added their Suites products to the list, giving notice that titles such as the Building, Infrastructure and Product Design families would become rental only products on August 1, 2016.
So for now the Buy or Rent question certainly applies to Autodesk software. Getting back to the meetings with the finance people, what kinds of questions can you expect them to ask you before approving a software purchase?
Cost for both options
- What is the net cost with discounts and does it include maintenance? Maintenance Subscription costs for perpetual licenses is a critical cost component. Aging perpetual licenses can quickly lose their value if not kept current. Autodesk is adding an increasing number of features/functions on both the desktop and in the cloud throughout the course of year. Gone are the days when nothing changed until a new set of CDs arrived. Desktop Subscription (rental) titles include all updates during the term of the agreement.
How long is the software to be used and who will be using it?
- Is the license to outfit a new, full-time hire? Or is it to be used on a specific project with a predictable duration? Is the software needed for a contract employee who works off premise? A summer intern? A license for a permanent employee constitutes a much different type of need than that for a contract employee working on a term project.
Are there financing options?
- Financing the purchase of perpetual licenses is a well-known option. Financing annual and multi-year Desktop Subscriptions is somewhat new. Although Autodesk offers Desktop Subscriptions for a variety of terms, the cost is an up-front charge for the entire term. Financing is a way to enjoy the benefit of a Desktop Subscription while paying a fixed monthly amount for the term of the rental.
When is the crossover date?
- The crossover date is when you’ve spent more to rent a license than to buy it Maintenance Subscription. Because annual Desktop Subscriptions (rentals) enjoy no-charge updates for the duration of the agreement, it is necessary to include Maintenance Subscription when calculating the full cost of a perpetual license for an apples-to-apples comparison. Given Autodesk’s current pricing structure the crossover date for most titles is about three and half years out. However that date varies from product to product so it is best to calculate each one on a case by case basis.
What’s the best use of our capital?
- At the end of the day, that’s what the finance people want to know. Put some thought into the return you expect to get from new licenses. Think in terms of hard dollar savings by way of increased productivity or improved revenues from better designed products.
For more information about Desktop Subscription see here.
We invited Ray Savona, VP of Americas Sales at Autodesk to address these and any other questions you might have related to Desktop Subscription. Join us on September 24th for a brief webcast and get detailed answers to how this may impact your business and how KETIV can help you take advantage of Desktop Subscription.