The concept of "pay-as-you-go" software is gaining more acceptance in the market as customers tire of paying licence fees, says Philip Welman, MD of Cape management software supplier Sintrex.
Welman says customers have been increasingly questioning the economic value-add of their software purchases and whether they are receiving a proper return on investment, especially since they often do not use the products to their full capacity.
"Payment should be linked to the way a company works its software or to some other measurement of the real use that is gained from it," he says.
Two market research companies, Aberdeen Group and Saugatuck Technology, recently concluded that 20% of companies would prefer to pay for software through some form of ongoing subscription, rather than a single up-front licence model. They expect this trend to grow substantially in the next two to three years.
Welman says pay-as-you-go software is not necessarily another form of renting software, but rather a means by which a supplier can grow with the client's business.
Sintrex offers its clients a payment package based on the number of objects (such as computers or peripherals) in a network they wish to manage, with a 10% leeway to either increase or shrink the size of the network.
"This has great benefits for outsourcing companies as they do not have to make big initial investments into their management systems and then find clients. Rather, they are only charged as and when a client is gained," Welman says.
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