Solving the challenge of evaluating subscription versus perpetual license businesses.
According to a Gartner Study, published in 2017, 80 percent of software vendors will change their business model from perpetual licensing to subscription pricing by 2020. Hence why it is key to define and establish performance indicators to address the challenge of evaluating subscription versus perpetual license sales. We usually discuss this topic with our clients around the following use cases:
- During the business model transition phase, in order to determine a perpetual or subscription equivalent view for key management decisions in sales and operations. Moreover, to establish comparability between license and subscription business units.
- To determine a software company valuation prior an exit or acquisition transaction in order to establish an additional value dimension which will be used to asses enterprise value.
Base Camp Management Consulting (BCMC) is experienced in translating subscription sales into license sales or vice versa. In close corporation with key stakeholders like management, investors or sell-side brokers BCMC develops a fully integrated business case model that helps to perform the translation processing automatically. We support our clients to transpose revenues in order to give management the basis for key strategic decisions, but we are also oftentimes approached to prepare the necessary figures in preparation for an exit or add-on acquisition process.
Based on our long-term project experience in the software industry, we deliver tangible outcomes with our proven approach combined by our extensive knowledge as well as state-of-the-art technology solutions. If you need further information in regards to perpetual equivalent valuation, please contact us.