Redgate Software, the leading provider of Database DevOps solutions, is joining other business software providers like Microsoft, Sage and Adobe, and moving to a subscription-first model. From January 2022, the majority of its product portfolio will be offered on a subscription basis, rather than solely under a perpetual license agreement.
Redgate already offers products like Flyway, Redgate Deploy and Data Masker on subscription, and more recently has trialed subscription offerings for its popular SQL Prompt and SQL Monitor products, which were widely welcomed by both new and existing customers.
Moving to a subscription lowers upfront costs, provides instant access to the latest features and security upgrades, and gives customers a more transparent, all-in price with support included. This pricing approach is the same for enterprise solution sales or sales of DBA and developer tools, bringing consistency to the pricing terms along with annual subscriptions.
Importantly, it’s also in line with the substantial shift in the way businesses and organizations consume software, which was highlighted in IDC’s latest Worldwide Software Business Model Forecast, 2021-2025.
This shows that the number of organizations moving to a subscription model increased markedly during 2020, and IDC predicts subscriptions will represent 83% of total software revenue by 2025, and that almost all organizations will transition to the model in the future.
For many businesses and organizations, the main driver will be moving capital expenditure (CapEx) costs from the balance sheet to a lower, more manageable and predictable operational expense (OpEx). For others, it will be stable budgets in the medium to long term with no large unexpected calls on cashflows.
Tom Austin, Director of Customer Success at Redgate, also sees simplicity as the key. “By default, simplicity is part of the subscription model agreement. There’s one yearly subscription which is easy to plan and budget for and increase or decrease the number of licenses in use. Our customers can equate that directly with the value they gain from the software. That in turn puts an obligation on us to ensure the software stays current with the changing technological and security environment out there, and truly delivers the advantages customers expect.”
Redgate has already announced the move to the subscription-first model to its existing customers, and is working with them to transition to the model in the easiest way possible. For those organizations with established internal processes which are tied to CapEx budgets, perpetual licenses are still being offered.
As Tom Austin concludes: “The move to a subscription-first model is, in many ways, a natural evolution for Redgate as a software company. We’ve discovered that the majority of IT decision-makers prefer it and for those who aren’t in a position to make the move yet, most products will still be available under a perpetual license.”
