Market Trends

As this is our first ever blog post, I’ve been struggling for days to come up with a title. With the name PACE, there are a lot of clever choices. “PACE of Change” came to me first, then “Keeping PACE”, “PACE in your Face”… Coming up with a name for the blog may be harder than actually writing it.

So, despite the lack of a catchy name, to begin our first blog, perhaps a look back at a very successful 2018 in the software business:

51% of businesses say they’re shifting the way they price and deliver their products or services to customers.

Last year was the year of the subscription model for PACE Anti-Piracy. Virtually every conversation we had with prospects and customers turned to when they would be rolling out a subscription offer. Inspired by Adobe and other success stories, nearly every software publisher wanted a piece of the subscription revenue pie, and who could blame them.

By 2020, all new entrants and 80% of historical vendors will offer subscription-based business modelsGartner Research

What software publisher wouldn’t want to get off the annual release roller coaster? Betting the business each year that the next release would capture new users, beat last years “best release ever”, or be compelling enough to get folks to upgrade is a gut check. The promise of a nice, predictable revenue stream that would fund continued product development is most compelling.

What publishers learned quickly was that taking a handful of old, tired products and offering them as a subscription bundle was not the key to software publisher nirvana. Successful subscription offerings stay successful by consistently adding value to the subscription bundle, such as high-profile new product additions and truly useful new features. Some larger publishers even hosted developer conferences to showcase their latest and greatest and to create a one-on-one relationship with their most devoted users and key influencers.

Other learnings were that some publishers’ products are just never going to be a good fit for a subscription model. For example, publishers with a portfolio of products that won’t ever expand, or products that are marketed at low price points.

In the first quarter of 2019, the dominant market trend we are seeing is publishers of high-value software that has traditionally been sold as a perpetual license plus maintenance fee are investigating usage-based pricing models as a means to move down market. This strategy potentially gets their software into the hands of mid-sized and smaller companies with little or no upfront cost to their customers. The metered usage fees, billed monthly, can then be mapped to their customers various profit centers, or charged to a project.

This model is even more attractive in vertical markets where the competition is open source software or where hacked versions of competitive offering are readily available for download.

Stay tuned for future posts. We will do our best to keep you up to date on the latest software industry trends and, with luck, spark some new ideas that will make 2019 a banner year for you. Oh, and maybe even come up with a name for our blog.

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