Software for small businesses is sold in two main ways. With a subscription you pay every month or year for as long as you use it. With a one-time licence you pay once to use a version of the software, and you may pay separately for hosting, updates or support. Neither model is always cheaper. This article shows how to compare them properly, with a worked example you can adapt to your own numbers.
What you are actually paying for
A subscription price usually bundles several things: the right to use the software, hosting on the vendor's servers, updates, and some level of support. A one-time licence usually covers only the software itself. To compare fairly, you need to add the missing pieces to the one-time option, or subtract them from the subscription.
List the costs on each side:
- Subscription: monthly or yearly fee, extra fees per user, location or device, paid add-ons, and price increases over time.
- One-time licence: purchase price, any add-ons, web hosting, optional paid updates or support, and your time (or someone's time) to install and maintain it.
- Both: hardware, payment processing fees, and training.
A worked example
The figures below are illustrative, not quotes from any vendor. Replace them with real prices from the options you are considering.
Option A: subscription. US$69 per month for one location, plus US$15 per month for one add-on. That is US$84 per month, or US$1,008 per year.
Option B: one-time licence. US$149 for the software and US$99 for one add-on, so US$248 once. Shared hosting at about US$10 per month adds US$120 per year.
| After | Option A (subscription) | Option B (one-time + hosting) |
|---|---|---|
| 1 year | US$1,008 | US$368 |
| 3 years | US$3,024 | US$608 |
| 5 years | US$5,040 | US$848 |
In this example the one-time licence costs less from the first year. But the comparison is not finished: you still need to put a value on what the subscription includes that the licence does not.
The costs that are easy to miss
Your time
Self-hosted software needs someone to install it, apply updates and keep backups. If you pay a technician, add their fee. If you do it yourself, estimate the hours honestly. For a simple PHP application on shared hosting, installation typically takes an hour or two, and routine upkeep is small, but it is not zero.
Updates and support
A subscription usually includes new versions. A one-time licence may include updates for a period, or none. Read what is included before buying, and decide whether the version you buy meets your needs as it is.
Price increases
Subscription prices tend to rise over time, and you have little choice but to accept them once your data lives in the system. A licence you have already paid for cannot be repriced.
Switching costs
If you stop paying a subscription, you usually lose access. Make sure you can export your data either way. With self-hosted software the data is already on your hosting account.
Currency
Many subscriptions are billed in US dollars. If your income is in Jamaican dollars, exchange-rate movements change your real cost every month. A one-time payment fixes that cost once.
When a subscription makes more sense
- You need the software for a short or uncertain period.
- You have no one, and no budget for anyone, to look after hosting and backups.
- You need features that only a large hosted platform offers, such as integrations with many outside services.
- You value having a single vendor responsible for everything.
When a one-time licence makes more sense
- You expect to use the software for years.
- You want your data on a hosting account you control.
- You want a predictable cost that does not rise or move with exchange rates.
- You or someone you trust is comfortable with basic hosting tasks.
- You want the source code, so the software can be adapted for your business.
A simple way to decide
- Write down how long you expect to use the software.
- Total every cost for each option over that period, including hosting and your time.
- List what each option includes that the other does not (support, updates, hosting, data control).
- Decide what those differences are worth to your business, then compare.
About our pricing
Everything in our store is sold as a one-time licence with source code, to run on your own hosting. Each product page lists what is included and the hosting it needs, and our Terms explain the licence. Use the method above to compare our products with any subscription you are considering. If you want a deeper explanation of the self-hosted approach, read Why self-hosted business software?
