Subscription model for software gaining ground

According to a recent IDC research report, the shift from the traditional model of upfront software licence sales to a pay-as-you-go subscription model is well underway. The shift is driven by several factors, including customer desire for more flexibility, as well as vendor desire for a more predictable revenue stream. The report concludes that by 2010 many software vendors will receive the majority of their revenue from the subscription model.

Amy Mizoras Konary, the IDC analyst who authored the report, says,

"The old adversarial sales model, where vendors attempted to shove software down customers' throats and leave for the next deal, is becoming a thing of the past," she said. "If you look at the software market, revenues are flat, and users are leveraging open source to deal with vendors. This is causing major reconsideration of licensing models all around."

A CNET article has the details.