PTC Puts Entire Portfolio on Subscription

The rising demand for flexible licensing -- or the pay-as-you-go model -- is a quandary for established mainstream CAD vendors. A newcomer like Onshape isn't saddled with an existing customer base that owns perpetual licenses; therefore, it can flaunt the rules and launch its software on subscription plan right off the gate. But things take much more planning for the big names that have built their business around traditional perpetual licensing.

Already advancing toward a cloud-friendly ecosystem, Autodesk took calculated risks and publicly declared the pending retirement of perpetual desktop licensing. After February 1, 2016, new purchases from the company will all be on subscription -- no more perpetual desktop licenses. Others take a less radical approach. Siemens PLM Software introduced a rental option (essentially subscription) for its CAD package Solid Edge in 2013, but it also continues to offer perpetual licenses of the same product.

SolidWorks keeps its flagship SolidWorks CAD package under perpetual licensing, but the company began offering two new products -- Mechanical Designer and Industrial Designer (initially launched under the names Mechanical Conceptual and Industrial Conceptual) -- under annual subscription.

PTC had reasons to be more cautious. In 2006, it tested the on-demand market with Windchill PDMLink and Windchill ProjectLink subscriptions. The reception was lukewarm, so the company left it in the hands of its partner NetIDEAS. But earlier this year, PTC acquired NetIDEAS and launched PLM Cloud, a sign that it feels the current climate favors SaaS.

In late October, PTC sent out an email to prospects, which reads, "Companies around the world have indicated they prefer the flexibility that subscription pricing brings to their businesses. That’s why PTC’s entire portfolio of offerings is available by subscription ... Only pay for what you need, when you need it"

The company offers its primary engineering and design software Creo in four flavors, dubbed Creo Engineering Packages: level 1, 2, 3, and 4 (see chart here for feature comparison). Level 1, for example, includes only core 3D modeling and direct modeling functions. Level 4, by contrast, includes design optimization, motion analysis, simulation, and project management.

PTC's FAQ on subscription licensing further clarifies the following:

• New subscriptions may have an initial term of 1, 2, or 3 years, depending on the solution, with one-year automatic renewals.
• There are pricing models available for customers wishing to convert from perpetual to subscription. Conversions back to perpetual are not part of a subscription license option.
• Customers are under no obligation to move their perpetual licenses to subscription.

Both Autodesk and Siemens PLM Software offers month subscription. PTC's plan requires a minimum of one year commitment. Whereas firms with longer project lifespans will have no qualms about the one-year commitment, smaller firms with project needs that fluctuate from month to month will understandably favor monthly subscriptions.

PTC doesn't publish its subscription pricing. The FAQ directs customers to "contact your sales representative or PTC Authorized Partner for details."

PTC's Windchill-brand PLM products are "Instant, Production Ready PLM, ... designed from the beginning as a web-based approach to PLM," according to PTC. The company FAQ on subscription doesn't clarify how PTC CAD products like Creo is deployed by subscribers. Most likely, it's locally installed but controlled by a subscription-validation mechanism, similar to how Autodesk delivers its CAD products to subscribers and how Siemens PLM Software delivers Solid Edge to renters.

Currently, browser-based CAD like Onshape remains an exception to the rule even among vendors who have embraced subscription licensing.