Here’s an intriguing, and possibly ironic, new payments software announcement and manifesto from 37signals (makers of Basecamp and Hey email.)
This seems to be a spiritual kin of their publications against and hosting migrations to their own hardware away from cloud providers, chiefly AWS.
Definitely intriguing and will be interesting to see what they do. Software used to be purchased this way – I remember paying $300+ (in 1991 dollars) each for Corel Draw and Microsoft Word. I still have images of those disks somewhere (copied them off floppy long ago to images stored on CD then to hard disk) and could re-install and run them if I really wanted to. Now I spend $100/year for an Office 365 subscription. The cost is about the same…upgrade every few years or pay yearly but the “value” is much different. Today I don’t own anything and if I stop paying, I lose the ability to use the software. I can see both sides to this. From the software developer’s perspective, subscriptions provide steady income and an incentive to keep cranking out improvements. But the “buy once” model also means the consumer has more leverage which places the burden on the developer to come up with features that are good enough to incentivize an expensive upgrade. I write software myself and understand that developers need to earn an living so I don’t mind subscriptions (but given the option, will always pay more to won outright) but my biggest issue with subscriptions is the annualized cost just doesn’t make sense for so many App Store apps. For example, I recently was trying to find an app to turn JPGs into PDFs on my phone (lots of scanner apps out there but wanted to turn existing images into a PDF). The “top” apps were all $9+/month subscription. For something that is quite simple and for which free apps exist. People have the gall to ask the same price I’m paying for the entire Office 365 suite for a simple scanner app. Add several of these subscriptions together and you’re now talking quite a bit of money of the year for software (much of which isn’t providing increasing value in the form of new features or great support).
Exactly. I don’t expect anything for free - but I’d like to think that for an app like that $10-$20 should be purchasable outright. This line in the article stands out:
businesses subscribed at luxury prices for commodity services they had little control over
I honestly don’t mind complicated software like a task manager wanting a few bucks a month instead of the previous $20-$30 one time purchase. If the yearly sub is what it used to cost every couple of years, I just chalk that up to inflation.
But some of this stuff is just nuts.
The best business model I have encountered so far is from the Agenda app. You start with free and pay a yearly sub and all the features that you have paid till the end of subscription are yours. Then you can again subscribe in the future and get the features again.
I personally really like that business model.
Their announcement says nothing about maintenance, break/fix, etc.
Interesting gap. SaaS contracts usually include fixes and support, as well as upgrades, customization, and configuration; it’s not just about software rental.
Katie
And hosting as well, which requires deep technical knowledge for non trivial deployments.
This reminds me of what I think is one of the worst parts about subscription software – the perceived “need” to keep shipping “improvements” to software. Sometimes, software hits perfection, but it feels like developers have decided to charge a subscription and so they have to do something, and that something makes it worse.
Alongside subscriptions, I think the narrative around “abandoned” apps drives this. I regularly see people say things like, oh, I’m hesitant to use that app because it hasn’t been updated in 8 months and doesn’t seem to be under active development. Maybe that’s a good thing!
/end rant
Sometimes, software hits perfection, but it feels like developers have decided to charge a subscription and so they have to do something ,
Agree! I’ve seen this happen to a number of apps.
One thing I do if I want to support the developer and the app isn’t too pricey is just buy multiple licenses. For example, I have owned [FastScripts]( FastScripts 3 (redsweater.com)) for over a decade but I buy a new license when I replace a Mac instead of transferring the license. It’s not required but helps the developer.
I’m imagining a dev somewhere automating the flipping of a couple of sentences in the UI and resubmitting once every month. Just put “minor UI tweaks” as the rationale, and they’d look like the most productive dev ever to new customers. 
(emphasis added)
I disagree. Now that there is a guaranteed income stream, there is little incentive to crank out improvements (don’t get me wrong, a good developer will honor this implied contract). You even say so in your post:
… and …
One of the issues I have with subscriptions is that it transfers the business risk from the developer, where it belongs (it is her business after all) to the customer, where it does not.
That’s where I’m especially intrigued by this. The company behind this moved onto their own hosting from AWS over the last few years and has released some open source software to make self-hosting web apps easier. They’re in a position to release some kind of breakthrough tooling that makes maintained, stable self-hosted software more broadly doable. No idea if they actually will do any of that, of course, and hoping for details soon.
I thought it was interesting that their business model seems to be: We sell you the software, you own it and host it yourselves.
I wonder if the other element of it is: And if you prefer, for a small monthly fee, we’ll host it for you and provide support… a la Wordpress: you can diy, or hire them to use Wordpress.com
37signals, as far as I know, has always had a good reputation. If they are launching new non-subscription apps they will have revenue from Basecamp and HEY to support the company and won’t have to depend on the success of their new line.
Depending on what they are going to produce that could be a big advantage.
As software devs, yes. Otherwise…
I like that model as well. Isn’t it similar to Keyboard Maestro or Hazel. One-time payment and then pay for upgrades (if you need more features in the newer version), else keep using the current one forever (as long as your OS supports it)
Agenda doesn’t have versions, like you don’t buy version 3 or version 4. You pay the subscription and whatever features currently available are yours to keep. So it eliminates tracking whether you paid for version 3,4 etc.
I don’t pay subscription and I have the features forever. I paid $5 one-time 1 yr ago and it still works fine. Don’t need the new features
It’s funny, this used to be the criticism aimed at upgrade software. The argument used to be “subscriptions are good because you pay for what you get, where paying for upgrades means the developer is incentived to constantly create new features to get people to upgrade and you end up with bloatware.” 
I think some developers charge a subscription these days to pay for the updates that are needed every time Apple breaks something with a patch or OS revision.
The something they do may occasionally be their way of telling the world they are still alive. 
“hasn’t been updated” site:talk.macpowerusers.com - Google Search