When Microsoft launched Office 365 in 2011, the use of software in the cloud was previously focused on likes of Google and Salesforce. Since that time, other large vendors, notably Adobe, had started to experiment with the cloud licensing model, but had not yet fully committed until later.
What does this mean to enterprises? More importantly, what is driving large vendors to pursue this strategy and what does it mean to organizations and their software managers?
Let’s first look at what this means to vendors. For vendors, subscription licensing (remember SaaS?) means predictable and consistent revenue. It also means that customers who take advantage of the subscription model (or are required to use it, in the case of Adobe) end up paying for maintenance even if they do not want maintenance, so long term revenue to the vendor increases.