[krewast]

> bean counters and MBA's live in this mythical land where $100,000 over 5 years or $20,000 a year is some how different

There are differences and they are far from mythical!

A big one: Liquidity. If you spend $100,000 today, you all of a sudden have a $100,000 less in your bank account. That may limit what you and your team can do this year - because budgets are finite. If you have the option to pay $20,000 each year over 5 years your liquidity goes down by that amount each year. Much easier to plan and usually less risky.

Another one: Flexiblity. If you don't need the product or service after year 3 any more, stop it. You paid $60,000 instead of $100,000. Less. Money. Spent. (And yes, it also goes into the other direction (pay more than $100,000 if you use it longer) but that's a trade off many businesses are willing to make. 5 years is a long time, things change.)

Last but not least: Opportunity costs. Paying $100,000 at once is expensive because it means you can't invest the money into something else that generates interest. If you pay $20,000 each year it means, that you still have $80,000 in the first year, $60,000 in the second and so on. Use this remaining money to invest it into something that creates interest for you (bank account, stocks, index fund, ...). That's another win! (And also the reason why big companies pay their bills as late as possible - it adds up for them!)

[syshum]

lol, I figured it would be faster before a MBA responded about opportunity costs....

>>>Liquidity.

That really depends on how you budget, but for many things I have been involved in these are well known costs that can not simply be postponed really, while it may have some impact on Liquidity, if budgeted for property it would not no matter if it was lump sum or spread out. The effect on a 5 year picture is the same

>>Flexiblity

This is 100% false, SaaS Opex Spend is FAR FAR FAR less flexible than CAPEX spend in the IT Space, take for example Office 365 Vs ONPrem, with OnPrem I can forgo a Capital expense to upgrade some servers, EOL a SAN disk array a year later, or choose to stick on Office 2016 for another year if needed.

Office 365 you pay that bill or your services shut down. That is why company like AutoDesk has removed the ability to buy perpetual Licensing under a CapEx model and have moved to Subscription OpEx model, before if you wanted to Stay on the Previous version of Autocad sure you might take a security risk but the software still worked. Now you do not pay your annual licensing fee well your software no longer works

So no this new OpEx model is in no way more flexible, it more akin to ransomware, pay us or we lock you out

>>>Opportunity costs.

i will agree with opportunity costs. Still from a highly logical and engineering focus more than a Finance focus I will still look at $100k over 5 years or 20K annual to be the same...

[fsloth]

Given that Opex costs are lower than full license, I claim it still feels less risky. As an AEC firm, when you have a project going on, you can pay the Opex, and when not, you don't need to pay - and probably go bankrupt anyway since you need to have ongoing projects.

I think opex saas model might actually be beneficial for AEC industry. Generall you would have paid the yearly license anyway - some products have so called "maintenance" licenses where you basically pay for the company to fix bugs in older versions. And get a release every year or so - patiently waiting for your bugfux.

If licensing moves to Saas, then I would expect customer expectations for better service to rise, bringing in more rapid innovation and quality.

At this point all the CAD houses have been sitting on decades old legacy products and basically charged rent for minimal added value. I would imagine with more frequent releases and more flexible licensing models customer value would increase.

For example if you pay for product x some opex in project and find it dissatisfactory then you can try in next project product y if it works better without paying the expensive yearly license.

Should be good for competition as well (Autodesk is not the only AEC software house, even though they seem the dominant gorilla).

[krewast]

> That really depends on how you budget

It depends on how big your budget is. If it's tight, the problem of purchasing expensive licenses at once may be a blocker - bad for the buyer AND the seller!

> This is 100% false, SaaS Opex Spend is FAR FAR FAR less flexible than CAPEX spend in the IT Space, take for example Office 365 Vs ONPrem, with OnPrem I can forgo a Capital expense to upgrade some servers, EOL a SAN disk array a year later, or choose to stick on Office 2016 for another year if needed.

I don't see how this proves that SaaS is not flexible? You also forgot to account for the necessary expenses to run all this On-Prem stuff. You need an expensive team that you pay on a monthly basis --> OPEX

> Now you do not pay your annual licensing fee well your software no longer works

I agree with you that this sucks.

> Still from a highly logical and engineering focus more than a Finance focus I will still look at $100k over 5 years or 20K annual to be the same...

You can look at it this way but that still doesn't make it (not even "highly logical") the same. Sorry.