Every time an organization runs into unexpected costs from an enterprise licensing agreement, a new potential cloud computing customer is born.
But is the cloud subscription, pay-as-you-go model really better at saving customers money? According to three licensing experts CRN spoke with, the cloud model isn’t the cost-control panacea some ELA-weary customers might think it is.
With on-premise software, vendors make money from upfront licensing fees and from ongoing software maintenance fees. In the cloud, these fees are often bundled and factored into the price of subscriptions. So while cloud services don’t come with ongoing maintenance fees, they do have their own set of costs.
“The treadmill isn’t really going away—the industry is trading a maintenance treadmill for a subscription treadmill,” Kim Addington, COO of NPI, an Atlanta-based firm that helps companies manage software licensing, told CRN. Enterprise vendors are redefining their approach to volume licensing in the cloud, and they’re going about it in different ways. Microsoft and Adobe Systems are two examples.