ArchiCAD has always been a perpetual licensed piece of software. Over the years there have been a few different license types that allowed us to sell, for example, 200 hours pay per use or a one-month rental license and such like where customers had short term overload. However, there was no real Subscription based product.
The benefit of the recurring revenue generated by ARCHICADselect was great for our business, but I really felt with the way software was going that we needed to be able to offer an actual Subscription based ArchiCAD.
I raised the idea with GRAPHISOFT and explained why I felt it was important and that it should be investigated further.
However, I’m not really one to sit around so I kept thinking about Subscription and how I could achieve essentially a Subscription product with the licenses I could currently sell. Repeatedly selling a one-month rental license could kind of work, but with the way that the licenses were supplied and updated meant there could be problems with this approach. We therefore settled on selling a 12-month license based on 12 monthly payments. We had to take a bit of a risk as we had to pay GRAPHISOFT for the licence upfront but based on our payment terms we would have 1-2 months of payments already received so our exposure was reduced. The terms of the purchase were based on 12 payments, so while it was paid monthly it couldn’t be cancelled during the 12-month period.
Ultimately, we wanted a web based low/no touch system but that would come later. We sold these pseudo subscriptions and set up payments via direct debit.
In the first year we sold over 100 of these licenses. In many cases companies found it an easy way to commit to another seat of ArchiCAD. After the initial 12 months many customers purchased a further 12 months, others decided to commit to a full perpetual license and others discontinued as projects were finished or staff had left.
Of the 100 licenses only one turned into a bad debt.
The results of what was essentially an experiment were extremely promising. Full license sales had continued well and the new offering helped ‘lower the bar’ for others to jump on the ArchiCAD wagon.