Why Software Companies Should Adopt a SaaS Subscription Model

In the U.S., software contracts usually forbid resale, but recently the European Court of Justice ruled that developers can’t forbid the resale of programs

In the U.S., software contracts usually forbid resale, but recently the European Court of Justice ruled that developers can’t forbid the resale of programs or forbid companies from downloading updates from the Internet.This puts a serious kink in the business model of most software developers, since many U.S. companies can now acquire used software through European subsidiaries.Companies spend $250 billion to $275 billion a year on software, according to Bloomberg. Meanwhile, software is usually discounted 30-70% off the full-price, and software developers never see a dime from those re-sales.That may be the most compelling reason for software developers to switch to a cloud-based, Software-as-a-Service model. And in fact, Adobe (whose Photoshop program, along with Microsoft’s Word and Excel, is often the most re-sold program on the market) recently came out with a SaaS offering.At the same time, subscription sites should be careful about what downloads they offer. Some types of content – like Webinars and recordings- could be resold in the EU under the new law.

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