What you have is cheaper

In the past few years, we’ve seen how on-demand access to assets, rather than ownership, has set the tone for financial transactions. We’ve seen that in industries like accommodation, transportation, entertainment, computing, and software.

Aside from other obvious advantages, such as convenience, increase in choice and offering, and scalability there is a strong financial incentive convincing people to rent or subscribe rather than to own.

Why would I buy a movie when I can subscribe and get access to hundreds of movies? Why would I buy a server and the hassle associated with it, when I can rent any number of servers? Whenever I want, as long as I need it, scaling up and down to my preference (note to self: turn of those EC2 instances).

When it comes to software things are a bit more nuanced. Many companies decided to move to a subscription model to mitigate audit risk, thinking that cloud software doesn’t need to be managed. Or because of the lower upfront cost. However, we see that often subscriptions are more expensive than traditional forms of licensing. Depends how long is your measuring stick. 

As long as you manage it properly, the cheapest software is the software you already have.