Back in the day, there was only one type of software contract available – the flat fee perpetual license.  You bought it, you owned it.  Forever.  There might be a maintenance fee attached, giving you the right to get upgrades and contact the help line, but that was separate from the contract. 

 

The first complication to this was tiered pricing.  It occurred to the software sellers that they could offer multiple prices if they based the cost on the size of your computer.  That way they could charge small companies a little and big companies a lot for essentially the same package.  In addition, it allowed an additional revenue stream because when you changed from one box to another, the new box was almost inevitably more powerful than the old and so you migrated very nicely from one tier to another.  That in turn would bump up your maintenance which was calculated as a percentage of the current purchase price.  This was very popular until people really began to hate it, mostly because it complicated the process of getting a new box.  Often the new box was cheaper than the old one, but once you factored in all the increased maintenance costs it could be much more expensive. 

 

Seeking to take some of the pressure off the tier, software sellers introduced the ‘seat’ license where the cost was based on how many people you had using the software.  This was quite popular in the 90’s and still is but it has it’s drawbacks too, most notably, defining what a ‘seat’ was.  Was that one, real physical person, or was it a signon entry in WRKACTJOB (in which case one person might have several signons at one time, possibly with different user ID’s, and so be double or triple counted)? 

 

But all three of those options (forever, tier, and seat based licensing) all had one thing in common.  They were perpetual licenses where even if you dropped maintenance you still had a legal right to use that software. 

 

Over the past ten years, we have seen repeated attempts to move from perpetual licenses  to ‘usage’ licenses where you have the right to use the software only as long as the software supplier says you can (generally that means while you are on maintenance).  Drop maintenance and the supplier can drop you from being authorized to use the software.  In every day parlance that is referred to as ‘being trapped’.  For the software supplier’s it’s defined as a ‘consistent revenue stream’. 

 

The latest salvo in this ongoing battle is the announcement by Infor that some of their newer products, like My Day and EAM (Enterprise Asset Management) will now be available in the familiar ‘on premises’ format as well as via ‘hosted’ and ‘subscription’ contracts. 

 

Hosted and subscription are both flavors of Software as a Service (SAAS).  This term has been around for a while but is really getting some attention now.  Hosted SAAS has you purchasing an actual copy of the software but rather than having to install it on your machine, it is installed and run from a machine controlled by Infor.  You establish a connection to that machine and then run the software from there.   

 

Subscription SaaS is akin to cloud computing because now you do not actually own a copy of the software but are rather using a copy that is being used by a number of other customers simultaneously.  The data files associated with that software would be yours (your data would be kept separate from the other clients who are using that software) but the question of who owns that data is a little more vague. 

 

For the Hosted contract you would be charged your normal license purchase price, plus a support fee (I’m assuming that’s ‘maintenance’), and a ‘hosting/managed services fee’ (to cover the bother and expense Infor would go to hosting your software.  Subscription contracts would not have a license purchase cost (instead having a license rental charge) but the support fee is there as well as a ‘managed services and hosting fee’.   I think you can see the difference. 

 

Much of this is still evolving and the rules will undoubtedly change based on the mutual tug of war between Infor and it’s clients.  For us in the PRMS world, things are still status quo.  Since PRMS is not a strategic product for Infor, it will not be a part of this brave new world of licensing.   Those who are on a permanent license, stay on a permanent license and no other options are really offered, although I suppose if the need came up Infor might be flexible. 

 

But if you went to LX, that would be a somewhat different story.  Anyone upgrading from PRMS to LX would not actually be upgrading.  You would be purchasing a brand new license for LX and then migrating your data from PRMS to LX.   And LX will be available either with an ‘on site’ license (although it’s unclear to me if that means permanent or not) and ‘hosted’.  It will not be available as a subscription at this time although when there is a demand for it I’m sure it will appear. 

 

Flexibility.  That’s what it’s all about.  Or complexity.  It’s one of those two.  Either way, make sure you know what you’re doing contract wise.  It’s not your grandfather’s license anymore.Â