Permanent Licenses and Bulk / Multi-year Discounts

F Harvell     Mar 18 7:14PM 2017

While I am very interested in the Duplicacy offering, I am also very uninterested in purchasing software on a subscription. Do you offer a permanent license option?

Subscription services only benefit the vendor. They are a form of extortion where the vendor demands a fee regardless of any additional value being added to the product. If the extortion fee is not paid, the software ceases to operate. (This, by the way, includes the loss of functionality if the vendor goes out of business. A common problem with small companies.) Without an ability for the customer to negotiate payment for services, e.g., paying for additional value provided—a version update, there is no incentive for the vendor and the customer is simply wasting money. (Subscriptions require a vendor to be benevolent—a quality businesses and people rarely exhibit.)

I do believe in paying for support and for additional services, i.e., the traditional license and support fee structure. If a vendor provides enhanced functionality and support services, they deserve to receive remuneration, either in the form of payments for new version releases or for continuing support services. I am not, however, willing to be held hostage by a subscription fee.

That said, I would also expect that there would be some benefit to bulk and extended purchases. I have about 15 machines that I would like to use the software on, however, at $540/year and $2,700 for 5 years, the Duplicacy software costs would far exceed the cost of the cloud storage. Please let me know if you intend to introduce any significant bulk and multi-year purchase discounts.

gchen    Mar 18 11:46PM 2017

I agree with you that the cost of Duplicacy should not exceed the cost of cloud storage for large volume customers. Ideally we should be taking a 20%-30% cut if cloud storage providers are willing to share with us the actual numbers.

The current rates reflect our estimates on the cost of an average customer -- it may be too low for some while too high for others.

We don't like the idea of permanent licenses. A permanent license with life-time upgrades is not sustainable; a permanent license with limited-time upgrades would only make it much harder to maintain.

So I think what is really missing from our pricing model is the volume discount. I will be working on a discount tier based on the number of licenses/years and post it here.

gchen    Mar 19 10:27PM 2017

Here is the discount table based on the number of license-years:

License-years      discount
5 - 9 10 %
10 - 19 15 %
20 - 49 20 %
50 - 99 25 %
100 - 199 30 %
200 - 499 35 %
500+ 40 %

In your case, if you buy 15 5-year licenses, the number of license-years is 75 so the discount will be 25%.

F Harvell    Mar 20 10:12AM 2017

I certainly agree that a permanent license with free life-time upgrades is not a viable business model. That does not preclude the delivery of permanent licenses (to the version purchased) and the offering of a support subscription. This model empowers the customer by giving the customer the option of remuneration for value received.

In other words, a permanent license allows my business to continue to operate in the event that Acrosync goes out of business.

Also, I have no problem paying a (reasonable) annual support fee (that includes updates and upgrades) or paying for upgrades that provide additional value. These two choices become options that my business can choose to pay—if—the vendor continues to provide additional value. It is not a subscription based, extortion fee that demands payment if I want to keep the system operational, regardless of any additional value being provided. Harder for you to maintain as a vendor, yes. But that is the difference between customer service and extortion. The former requires the active participation to retain customers, the latter requires the threat.

While I do strongly feel that a permanent license is foundational, I do applaud your attempt to make Duplicacy relevant by introducing the discount structure. Unfortunately, the very nature of your solution makes the equation difficult. For example, the storage space estimate (by the B2 cloud storage calculator), estimates, for 4TB of storage (which is double my current backups of approximately 2TB) and with a growth of 50GB / month, is estimated to be only $1,687.50 over 5 years where the license fees for Duplicacy would be $2025. This is a far cry from 30% of the cost of the storage. Even if Duplicacy's main benefit of data deduplication was more than 300% efficient, i.e., it would take 12TB of storage instead of 4TB over the 5 years, it is still be cheaper to use a regular backup application and full B2 storage (at $4087.50 for 5 years).

An approach would be to make the software cost a flat $50 / machine and charge an annual support fee of 20% / year (after the 1st year). Continue to sell 2-5 years of support up front. That would make your solution attractive and provide you with a growing revenue base that is built on customer service.

gchen    Mar 20 8:37PM 2017

I have a slightly different view on the functions/purposes of a subscription. Certainly a subscription should provide updates and upgrades if need be. But if there aren't any updates and upgrades within a certain subscription period, does it mean the subscription provides no value? To me, a subscription is more like an insurance policy, a guarantee that we will try our best to fix any bug if there is any. So just like an insurance, if there hasn't been any bug we can't simply say the subscription is useless. For this reason, we are against version-bound perpetual licenses -- it is like selling a warranty-less product.

That being said, the pricing model you proposed makes sense to me, as it rewards customers who have already had experience using our software and thus are less likely to require support. Being a small company, we are very flexible at meeting customer demand and can certainly afford to experiment different pricing models. So let us give it a try -- the website has been updated to reflect the new pricing.

asenta    May 2 11:46AM 2017

I do agree that with something like backup software, where you may have a significant investment in bandwidth charges to seed as well as storage and the need to be able to recover something that may be years old, the concern about the backup vendor going out of business or selling out or consolidating into another vendor must be addressed. This would be particularly true if you were providing services for a fee using the software unless you wanted to insert a very visible disclaimer to the customer. The disclaimer would be one way of addressing it; however, it introduces a very real strong negative for a hypothetical situation that may not occur. There might be a more positive alternative.

What about placing a permanent (perpetual license) key in trust? There would be some costs associated with setting that up and some minor ongoing costs associated with maintaining it. It might be reasonable to ask that users who are concerned about this cover, or contribute to, the cost. You could charge a fee to establish an account with this option under which multiple licenses could be registered. This would be a separate fee, over and above the fee for the software license. As an alternative you could make it only available as part of an annual software maintenance contract to incent users to continue to contribute. I set something like this up years ago and found it well received. There are many possible permutations but placing the perpetual key in trust sets aside a significant risk for the licensee without changing your business model.

It goes half way to addressing the concern about wanting to purchase a perpetual license. Half way because it doesn't provide a one time cost for perpetual use of the version purchased but it does solve the very real problem associated with you going out of business.

gchen    May 3 7:34PM 2017

This license trust is an interesting idea. How did you set up the trust or did you use any third-party service?

Charles    May 5 6:37PM 2017

I thought Duplicacy's price was pretty decent compared to other backup softwares. I do agree that backup and restores should not stop working if a subscription isn't renewed. Upgrades and maybe other features would be acceptable. After reading I actually thought that it made sense, but there's no way without reading that response that I would be okay with that. I might deal with it, but it would put a bad taste in my mouth if I went some odd months with no backup because my cc on file expired and I didn't keep up with my e-mail notifications about it properly. I really don't know a better way than making people pay subscriptions for support and updates, but not the software. Actually, this might work: lock down the ability to add and edit backups and otherwise manage backups until the license renewal is paid, but still let the backup process work. This is just my opinion on that topic. Again, I think the pricing seems pretty fair beyond the fear of backups not working unexpectedly.

I don't believe that any kind of complicated pricing plan including a perpetual license trust or whatever needs to be put in place to guarantee that the software will always work for 2 reasons. 1. All the company needs to do is promise the customers that there is some procedure in place for giving everyone perpetual licenses or otherwise turning it off in the event that the company goes out of business. Making that process transparent through some sort of documentation might put minds at ease. 2. If the company does go out of business and the software stops being maintained, you (the customer) would need to switch backup software as soon as possible. You only put yourself at risk by staying with the software for too long. For instance, a backup service could discontinue an authentication method for more secure options. If you wait until the last minute to switch, then you are left with no backup until you start using another service.