Thursday, April 19, 2007

When "All-You-Can-Eat" is the Wrong Plan: a Plea for Metered-Rate Software

Why can’t I license productivity software on a metered-rate basis?

I had a mini-project that required vector-art manipulation. The assets I was using were Illustrator files, and I felt Illustrator would be the best tool for the job. But I didn’t have a license for Illustrator. I’ve always wanted Illustrator, but not enough to lay out the big bucks … after all, I would only fire it up a couple of times a month. Ditto for things like Photoshop, QuarkXPress, Premier and lots of other neat tools. If only I could install them and license them on a usage basis!

Without this sort of licensing, the options include:

  • Use some substitute app which might not be as good, as useful, or industry standard
  • Obtain a cracked/pirated copy of Illustrator
  • Find someone with a licensed copy and go use his
  • Install a new trial copy into a virtual machine (kinda gray-market, and a bad option for heavyweight apps anyway)

With metered licensing, here are potential advantages:

  • I get to use Illustrator, becoming (hopefully) more productive
  • My company benefits from my productivity and from lower licensing costs than if I needed to buy a full license
  • Adobe benefits because I develop my skills on their app, strengthening its hold in the market, and I don’t go install my 90-day trial of this
  • Adobe receives revenue from me where otherwise they would not

The metered approach is a total no-brainer: I can have all the apps I want installed permanently (not 30-day trials) on all my computers. At a cost of few cents or a couple dollars, it’s easy to pay as I go… and if start using the app heavily, the bills add up to the point that it’s clearly cheaper to buy. Maybe the publisher is even nice enough to apply some rent-to-own logic, so once I’ve dropped a few hundred buck, I am offered a discount to buy a permanent license.

It makes no sense to charge the same amount for Premier or Final Cut Studio regardless of whether the customer only edits a couple of videos a year, or is a professional editor who makes a living with it. One approach is for a publisher to create lots of SKUs at different price points for different user levels (Visual Studio Express Editions, Standard, Professional, Team System, Tools for Office) but that puts a huge burden on the publisher. Just let the users install the Ferrari version, and charge ‘em for what they do with it!

The infrastructure is already there — most of these apps are available on some kind of trial basis, and the entire install can be downloaded from the publisher’s site.

The per-copy tracking infrastructure is there for many publishers — activation codes are commonplace for expensive software.

Micropayments? Aggregate the charges on my “Microsoft” or “Adobe” or cross-industry-pay-per-use account, and bill me every quarter or whenever the total is high enough to justify it.

Tracking my activity in the app? That’s easy enough (LexisNexis has done this for a long time). Don’t charge me per minute or session, that encourages me to shut down the app, and makes it really expensive for a newbie to learn. Charge by use case: if I do something that every freeware clone also does, it’s cheap… but if I’m hitting the killer differentiating feature, whatever that is, make me pay.

This is free money for software publishers. Folks who absolutely need the app will already have it (hopefully legally), while pirates just bittorrent a crack. The metered system works for all of us in between, and I think that’s orders of magnitude more people than the publishers even imagine.

1 comment:

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