The truth about long term rental vs old fashioned perpetual
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At first I thought moving over to rental licencing seemed like a good idea. That was until I did some rough calcs over the long term. I did a comparison of costs for rental vs traditional standalone perpetual licences, plus annual subscription, and calculated the TCO over 10 years of licence usage.
I did not allow for price increases or discounts or special deals to soften the blow. Neither did I factor in VAT.
Now, it is important to realise here that most organisations with either standalone or network pepetual licences are probably paying annual subscription as well for the obvious benefits that subscription brings. Free upgrades (well not exactly free because we have to pay the subscription fee) but Autodesk does the hard sell and makes us think upgrades are free. But I'll let that pass.
The point here is, if I am subscribing to a software product for the long term then rental looks like being a cash cow for Autodesk. Here are the rough figures for a one licence of BDSP. I haven't uploaded the individual costs per product just the totals below.
For Years 1-4 inclusive rental is cheaper, but from Year 5 onwards rental is more expensive and it gradually gets worse as time passes. So that at the end of 10 years on rental I would have paid over £7k extra than I would have for standalone capital cost plus annual subscription. Obviously I don't like this!
| Example of cost comparison over 10 years on a single BDSP licence (no discounting, no price increases during that time) | |||||
| Year | Rental | Standalone plus Subscription | Differential | Cheapest option | |
| 1 | £2,200.00 | £6,785.00 | £4,585.00 | Rental cheaper | |
| 2 | £4,400.00 | £7,670.00 | £3,270.00 | Rental cheaper | |
| 3 | £6,600.00 | £8,555.00 | £1,955.00 | Rental cheaper | |
| 4 | £8,800.00 | £9,440.00 | £640.00 | Rental cheaper | |
| 5 | £11,000.00 | £10,325.00 | -£675.00 | Standalone plus Subscription cheaper | |
| 6 | £13,200.00 | £11,210.00 | -£1,990.00 | Standalone plus Subscription cheaper | |
| 7 | £15,400.00 | £12,095.00 | -£3,305.00 | Standalone plus Subscription cheaper | |
| 8 | £17,600.00 | £12,980.00 | -£4,620.00 | Standalone plus Subscription cheaper | |
| 9 | £19,800.00 | £13,865.00 | -£5,935.00 | Standalone plus Subscription cheaper | |
| 10 | £22,000.00 | £14,750.00 | -£7,250.00 | Standalone plus Subscription cheaper | |
| Note: Short term rental is cheaper (over first 4 years, long term rental is considerably more expensive and gets more expensive year on year. |
I'd much perfer the following:
| Year | Rental Year 1 Plus Subs as Rental years 2 - 10 | Rental Years 1 to 3 Plus Subs as Rental years 4 - 10 | ||
| 1 | £2,200.00 | At £2,200 | £2,200.00 | At £2,200 |
| 2 | £3,085.00 | At £885 | £4,400.00 | At £2,200 |
| 3 | £3,970.00 | At £885 | £6,600.00 | At £2,200 |
| 4 | £4,855.00 | At £885 | £7,485.00 | At £885 |
| 5 | £5,740.00 | At £885 | £8,370.00 | At £885 |
| 6 | £6,625.00 | At £885 | £9,255.00 | At £885 |
| 7 | £8,395.00 | At £885 | £10,140.00 | At £885 |
| 8 | £9,280.00 | At £885 | £11,025.00 | At £885 |
| 9 | £10,165.00 | At £885 | £11,910.00 | At £885 |
Here I'd be paying off the capital cost over three years and then pay annual subscription thereafter. This is a much better rental model for me and would in fact save me money over the ten year example (right hand columns above).
I have asked our Autodesk vendor supplier about this but obviously they are a bit candid.
I believe Autodesk is going to make more money thier way over time. If you multiply this by the number of licences most comapnies have then the long-term additional cost expenditure of rental is just not sustainable for those of us who use software over the long term.
It would be no use Autodesk saying something like the cost spread would be applied by project, as most companies will be running multiple projects in parrallel so I will have to pay the extra amounts anyway long term. I'm not talking about short term, which is where rental is obviously more benificial in years 1 - 4 inclusive. However, some projects, particularly Healthcare, can last for 7 years or more, wherein rental starts to become less beneficial.
I fear such a pricing model will drive many SMEs out of business as they simply won't be able to absorb the ever increasing TCO.
I am open to be corrected. But I have checked my figures with our accountants and they agree I have my sums correct. Finiancially this is very worrying.
It is for this reason I will be maintaining our existing licences as standalone plus subscription for as long as I can. Unfortunately, though, from July 2016 I will have no option but to purchase BDSP on rental. Which means I may have to look for an alternative software solution that is more cost effective.
This is a shame as Revit is a very good application (apart from a few mission critical items regarding detailing that I have posted wish list items on AUGI about). But I digress...
