5 Replies Latest reply on Aug 28, 2016 4:49 AM by simonclement

    Offer Solutions as Subscription Based

    cindyzelinske

      I have built a system for a customer who now wants to offer access to its members using a subscription-based model. I am looking for advice from developers who have dealt with this. I am interested in hearing advantages, disadvantages. Did you use a service? Did you code and manage it yourself?

       

      Thanks in advance!

       

      Cindy

        • 1. Re: Offer Solutions as Subscription Based
          jjfcpa

          Cindy

           

          I don't have any Filemaker solutions that are sold with a subscription, but I do have two applications that were previously on an annual upgrade cycle that I now sell as a subscription service.  If their subscription expires, then the software stops.  There data remains intact, but they can't access it until they re-instate their subscription.

           

          Of course, you're always going to have some fallout when you do something like this, but for the most part, I'm very satisfied with the response.  The users who opted to stay with the old versions of the software are not the kind of users you want to retain anyway.  Since we make regular updates to the software I tried to sell this idea based on the fact that we could be more responsive to their needs by adding new features and enhancements on a more frequent basis than once a year. 

           

          I should add that one of these applications was initially released in 1985 and the other was released 6 years ago, so we have quite a few users.  The pricing didn't change... we still charge a high rate to "buy in" and then they pay an subscription fee each year which is about 1/2 the buy in amount.

           

          I'd be happy to provide more details if you like them.  Just ask away.

          • 2. Re: Offer Solutions as Subscription Based
            Mike_Mitchell

            Hello, Cindy.

             

            I have one solution that's sold on a subscription basis as one of its licensing options. I manage the subscriptions myself; when a user logs in, the application checks the status of the license against my server and closes them out if it's not valid. In my case, I based the model more on what FileMaker does with their subscriptions: Clients pay about 1/3 of the cost of a per-release license, but if they ever stop paying, the software stops working. They can convert whenever they want to a per-release model by paying the unpaid portion.

             

            The biggest advantages for me are a steady source of revenue and client stability. People are creatures of habit; they tend not to change what they have in place unless given a reason (because change is disruptive and requires effort). The biggest advantages for the client are predictability (identical costs, or very similar, year to year instead of a big bump whenever a new release comes out) and cost-effectiveness (because you can give discounts for the subscription model, based on new releases coming out more frequently than once every three years). Other advantages include making it much easier to keep all the customers on the same code base (people will tend to take upgrades much easier if they're included in the subscription cost) and not having to re-sell the solution every time you release a new version.

             

            Disadvantages are you have to manage the subscriptions and you have a lower initial payback. That's pretty much it, as far as I can tell. That's why most of the major vendors are going in this direction.

             

            HTH

             

            Mike

            • 3. Re: Offer Solutions as Subscription Based
              jjfcpa

              Mike

               

              You mentioned a number of things that we consider advantages for the client and advantages for us in adapting to a subscription model.  It's funny, as an enduser, everytime I thought about a subscription program, I sort of cringed, but I can see some inherent advantages.  Perhaps the most significant, which you mentioned, is that all your endusers are using the same up-to-date version.  From a support standpoint alone, this is a huge advantage for everyone involved.

               

              We took a different approach on product activation because we knew that not all of our users would have internet access to verify that they were current.  We've actually tried this in the past - verifying that they were a registered user that is - and this turned out to be more trouble than it's worth.  However, if the application is being run from a FM server, this would be pretty easy.

               

              In our case, our application is multi-client so our users create many client files.  It's an accounting application for professional accountants who service many clients.

               

              What we did is create an activation code that they entered that will enable them to use the program until the subscription period expires.  The activation code is composed of a number of pieces of information that is encrypted and verified against information we provide to the user that they have to enter.  One of those pieces of information and probably the thing that makes this work is their company name. 

               

              So each user has a unique activation code that only works with their company name.  Our order processing software generates activation codes in encrypted format (but still alpha numeric) and our software decodes it and compares it to the other information they have to enter (serial number, company name, etc.).  If it doesn't match, then the software will not activate.

               

              To prevent unauthorized use of our software, we determined that users were unlikely to give their activation information to a friend if they also had to give them their company name in order to activate the software.  Should they require support or customer service, their customer name (that they used to activate the software) is also transmitted to us so this has reduced unauthorized use to zero as far as we can tell so far.

              • 4. Re: Offer Solutions as Subscription Based
                cindyzelinske

                Thanks for the info guys!  It's comforting to know there are others who have done this.  I am sure I will have more specific questions as I work through this process.

                 

                Cindy

                • 5. Re: Offer Solutions as Subscription Based
                  simonclement

                  Hi Mike

                   

                  Only just stumbled upon this thread while looking for  subscription answers. I'm looking to work out how to charge users an annual fee in an automated manner. With your approach it sounds like you were billing the users annually? Did you then get their solution to access your FileMaker server to confirm their serial was still valid?

                   

                  I'm interested in trying to set something up that would be automated as much as possible and have yet to hit on an answer. Any suggestions appreciated!

                   

                   

                  Simon Clement

                  Arawak Database Solutions

                  27 Osborne Drive

                  Mt. Martha 3934

                  www.arawak.com.au