Most security software is purchased once, alongside the supporting hardware. The typical recurring cost tends to be for maintenance costs or an agreed fee for a service contract. There are companies who provide software only services with a recurring license fee, however this needs to be paid for every year and does not come with support or the ability to call an engineer on site to tend to an issue at short notice.
Service contracts provide you with an outcome, whereas a software license provides you with information that can be used to achieve an outcome. The recurring licence fee model has been very successful in various markets, however it has not been able to disrupt the buildings management market.
For instance, most building lighting systems are purchased in full at the point when the building is constructed, smart lighting retailers offer a recurring software license for the lights, control system and analytics, there is no evidence yet that building owners are willing to pay a yearly fee for their lighting systems with the option of paying a one-off upfront fee available in the market.
There are numerous benefits to one-off or recurring costs. In the example mentioned above the data collected will continuously add value to building owners, occupants and operators as it’ll enable them to manage energy savings and determine service costs.
Overall, it appears each building owner needs will determine whether they go for a one-off or recurring cost software.
If you missed part 2 of this series, click here for ‘Which Model…. Service Provider Driven Or Self-Support? …(Part 2 Of A 5 Part Series)’