The Trouble with Software as a Service (Part I)

How many technology-related monthly bills are you paying? Cell phone, Tivo, XM radio, etc. etc. For many people this is becoming not insignificant. A generation ago people made three monthly payments — mortages, utilities, and newspapers — and now the average American pays 12 bills a month, most of which have to do with technology.

Vendors (and investors) love subscription-based business. And what’s not to love? We have all learned the Gillette lesson well: Give away the razor, and make money on the blades — and if you can get people into a monthly razorblade contract …. well, so much the better. 

But there is a revenge effect in the works. The success of subscription billing means that consumers are increasingly becoming tapped out on monthly payments, with many people spending $250 a month and more on such bills. That eats into discretionary income in a hurry.

And then there are cussed and contrarian sorts like me. I actually look askance at people who insist on charging me monthly tithes for the privilege of using their software. Call it a service if you want, but I want to be able to choose between paying as a service and paying a one-time fee. Yes, I understand I might get socked again if/when I choose to upgrade to a subsequent version. But that way the billing happens on my schedule, not the vendor’s. I have decided against three software purchases lately — one of which was a slick synchronization product — because they insisted on selling to me subscription-style only.