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Field Service Management and the Cloud: Subscription-Based Models Versus Perpetual Licensing

Jun 9 • Features, Software and Apps • 2263 Views • No Comments on Field Service Management and the Cloud: Subscription-Based Models Versus Perpetual Licensing

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Tom DeVroy, Senior Product Evangelist for field service management in North America, at IFS explores the relative benefits of Software as-a-Service (SaaS) and perpetual licensing models for FSM, and argues that businesses need to choose the software that meets their business needs first, then select the delivery model that best suits their business model – not the other way around.

The global field service management (FSM) software market is set to grow by more than 11 percent annually until 2020, driven by advancements in data analytics and mobile technology. As more companies select FSM software, they will have choices to make about how they license the software and where the software resides—on hardware they own themselves or in data centres operated by their software vendor or a third party.

FSM software is a vital tool for companies that operate mobile workforces. It can do everything from optimising the service schedule to ensure that the right technician is at the right job at the right time, as well as encompass the service supply chain to ensure appropriate parts are available to complete service projects. Advanced capabilities may even include complex depot repair, reverse logistics and the delivery of prescriptive maintenance information to technicians to guide them through complex service processes.

According to Gartner, more than 80 percent of software vendors will change from traditional licenses to subscription-based by 2020

In short, FSM software enables an enterprise to ensure the efficiency of field service business activities, improve the customer experience and oftentimes increase revenue while mitigating costs.

Today, enterprises are much more likely to look at subscription-based Software as-a-Service model (SaaS), with the solution hosted off-site in the cloud. According to Gartner, more than 80 percent of software vendors will change from traditional licenses to subscription-based by 2020. But even if subscription pricing makes a lot of sense to a software vendor, it may or may not make sense to the software buyer depending on their needs.

Perpetual licenses attractive long-term

Up until the internet and broadband connectivity became a central component to most businesses, software was sold by default on a perpetual license basis. Purchased through a one-time license fee, the solution can be run either on a company’s own hardware or private cloud. The cost of the license is paid up-front and allows businesses to own the software outright with the rights to use it indefinitely, even if ongoing maintenance and support contracts are discontinued.

A company can provision software sold through a perpetual license on their own servers and support it with their own IT personnel. Or they can place it in a private or public cloud run by a third party vendor, including their software vendor.

Running software in the cloud allows a company to outsource common IT administration tasks while ensuring the server capacity can scale effortlessly as increasing user count or transaction volume demand. Cloud provisioning can also be attractive for FSM software because it can make it easier to access in the field.

The attraction of the subscription model

Software sold via subscription-based SaaS is also provisioned in the cloud. But unlike a perpetual license, the software is paid for typically through a nominal start-up fee to cover implementation and a monthly fee, generally on a one to three-year contract, rather than an up-front lump sum for permanent ownership. This is beneficial as the expense may be assigned to a given department’s expense budget because SaaS tends to involve a smaller up-front investment, below the normal threshold for a capital budget spend.

The lower up-front investment of SaaS also makes it attractive for businesses looking to start with a smaller footprint in FSM software that they can grow over time.

The lower up-front investment of SaaS also makes it attractive for businesses looking to start with a smaller footprint in FSM software that they can grow over time.

Organisations can implement an FSM solution in a single division or office as a proof of concept, perhaps limiting the scope of the initial implementation. When starting with a small number of SaaS users, businesses should always plan for the implications and costs of a wider implementation so the solution can be easily scaled across a broader number of users when needed.

Address the Service Lifecycle

A field service software buyer should prioritize their specific requirements first before looking at deployment models and license methods. It is important to remember that regardless of whether the FSM solution is purchased through a perpetual license or by subscription, FSM software will always fall short if it does not address the entire service lifecycle.

Beyond scheduling, dispatch and field mobility, there are many areas of field service applications should include to drive substantive value. Automated call handling, routing and dispatches are important to optimize call center functionality and day-to-day tasks, while traceability systems and spare parts management can give complete control over supply chains – keeping businesses safe and compliant.

Reverse logistics is another key requirement for businesses dealing with complex repair environments, as is project management for instant communication with remote personnel out in the field. Strong support for serialization will ensure compliance in regulated industries and support recalls when necessary.

Flexibility First

Another important thing to consider is the timing of software updates. Even when field service management is purchased through a subscription-based license, your business should always maintain control over when you upgrade to new versions.

Having the option to choose if owning the software outright on a perpetual license, or acquiring software through subscription, is a benefit to a potential buyer

There are many SaaS-based FSM products where the supplier will dictate when an update will occur. This could happen in the middle of your busiest season when adjusting to a new version of software would be too time-consuming.

Businesses need a solution that works around them and their operations, not the other way around. SaaS deployments ought to deliver pricing convenience, reduce potential downtime by hosting software in an ITIL environment, and reduce the level of effort required to manage the solution.

Having the option to choose if owning the software outright on a perpetual license, or acquiring software through subscription, is a benefit to a potential buyer. Rather than the vendor dictating your IT infrastructure and license acquisition, it gives you the customer the flexibility to choose what is best for your organisation. If a software vendor is committed to giving you control over your software environment, they will offer you this flexibility.

Software first

Whether businesses choose a perpetual license or SaaS field service management software, the focus must always be on the FSM solution and that it matches all of the key business needs. Only then can you choose your delivery model. With a fully optimized FSM solution available on both models, businesses can make sure their field service can meet specific needs, now and in the future.

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