The recent saga with the botched remake of the Grand Theft Auto Trilogy reminded me of the topic of this blog post, and I figured - what better time than now to get it out of my brain and into an array of bits. The topic today is rented software. Writing this I really feel like “old man yelling at (software) cloud,” but maybe by some miracle it’ll grab the attention of those making these kinds of decisions.
I grew up playing Grand Theft Auto: Vice City and Grand Theft Auto: San Andreas. Shockingly, those games were accessible to us as kids in Eastern Europe, and all moral quandaries aside, those games are somehow associated with some of the best memories I’ve had in my childhood. My brother and I wrapping up classes at school and running to the Internet cafe to drive around as the Miami-styled Tommy Vercetti, hopping on boats from a bridge, crossing the harbor in search of glitches that would allow us to go to the other island without passing the entire game - fun times. I can’t quite explain the excitement of getting a 128MB video card that could finally run the game without lags at home. Gone were the time limits and paying for extra five minutes to save the game.
That was 2001 to 2004. I am fortunate to have physical copies of the games, that I can pop into my machine at any time and play. Yes, I might need to use a virtual machine simply because modern versions of Windows don’t quite have the same quasi-DRM protections as they had back in the day (SafeDisc, if I recall correctly), but these titles work nonetheless. I honestly believe we’re not going to have that many of similar experiences in the future.
With the release of the updated “Definitive Edition” versions of Grand Theft Auto, riddled with bugs and all, Rockstar also took an interesting decision - they just straight-up removed old original versions of the game from their store as well as Steam. So, if you were unlucky to not have purchased a digital copy of the original before then, you were now unable to get it anywhere other than Amazon, third-party retailers on eBay, or through means deemed in violation of copyright laws. This reminded me just how fragile digital goods or the concept of a digital license is when it comes to software, and how big of a dark cloud it hangs over the consumer abilities in the future. Just like that - with a click of a button in some dashboard, the access to a digital good can be removed from consumers worldwide.
Where We Are Today
Back in August, I wrote about hostile software practices. The more I think about Software as a Service (SaaS) trends, the more I see it more frequently become another mechanism to take control away from consumers and into the hands of those that build and maintain the systems and tools that underpin the model. With everything becoming a service, from the operating system, to the productivity suite, to the games we play for entertainment - inch by inch we lose the fundamental ability to enjoy those for however long we want without an explicit dependency on an entity that can at any point pull the plug, decide to increase the price, or simply determine that it’s no longer financially beneficial for them to support a given product.
Let’s take a step back, though. What exactly is rented software? Simply put - anything that you can’t use for the duration of your life without paying rent (or any kinds of fees) for it. Just like paying rent for a property, your payments do not actually accrue to any form of ownership over the asset or a more permanent license for said asset. That is - just because you’ve spent $1,000 paying for Photoshop doesn’t mean that now you get a copy you can use without paying more. Hold the pitchforks - this is not about me wanting to reap the fruits of someone’s labor without compensating them for it. This is about large software shops being on a quest to move everything to a model where they charge customers for the use of a product because they can, not because of any significant (a very subjective measure, yes) addition in value.
Let’s not talk in hypotheticals. The way I see this, control of users’ software is slowly but surely being moved away from them through licensing models that kneecap the ability to use said software without doing two things:
- Being always online to “verify” the authenticity, usually with an account in tow.
- Being offered exclusively through a subscription without an escape hatch to a perpetual license.
There are some really big problems with both of the above, that I will get into further down.
Why Is This Happening
There are a few motivations for applying the two constraints above, including to:
- Squeeze customers for money.
- Control the distribution.
- Acquire a continuous stream of customer data.
Let’s dive into each of these.
Squeeze Customers for Money
This is the most obvious one, but it boils down to software vendors building tools to get as much dollar value as possible from a customer. On the surface, this might seem trite - yes, we get it, it’s about money, but said vendors also provide constant updates and new features and those aren’t free to develop. Allow me to throw in a hypothesis - unless you are working at a professional shop where you work hours within the same piece of software and squeezing every bit of optimization out of it as possible, you’re very likely using the same functionality over and over for a prolonged period of time.
When I used to use Photoshop, there were only a few tools that I used in my toolbox to edit photos and make adjustments that haven’t changed since the days of Creative Suite 2. Granted, I can’t call myself a professional photographer by any measure - I am sure there are power users that probably leverage to the fullest all the bells and whistles every latest version of Photoshop offers, but that wasn’t me. Back in the day, one could buy Photoshop for roughly $700 in full:
Now, arguably that is somewhat cost-prohibitive for certain audiences - not something every student (or even professional) can afford right off the bat, but it’s an option. If you look at the image above, in 2012 Adobe was very open to the idea of offering the ability for consumers to pay in full and snap to a specific version, or subscribe and get continuous updates. If I don’t need new functionality constantly, I don’t need a subscription.
But as it turns out, offering a subscription is much more financially lucrative because otherwise it’s very likely most professional shops will buy a license to Photoshop or any of the Creative Suite products and use those for five years or more without paying a single cent extra. I know I would because what I want to do with those tools is already there.
Same for things like a word processor or a spreadsheet editor. Luckily, though - Microsoft still offers the ability to purchase the Office suite upfront and not pay for the subscription. I need Word for typing the occasional official document and print it out. I use Excel to track my budget. I don’t use OneDrive and don’t need the AI-powered features. That’s OK, and I appreciate the ability to just purchase the software and forget about the long-term bill. This version is going to be enough for me for years to come, and I am happy to pay a bit of a premium to have it. Is it possible that I will never buy another Office product again just because I have this copy? Not likely. There will be updates that make performance better, make the UI easier to use, or shift us to a different CPU architecture that may become dominant in less than a decade. Then I’ll pay for another license. But I couldn’t care less about automated stock images or email templates.
My hunch is that we’ll see more software move to subscription purely because it’s the easiest way to make money without worrying too much for consistently providing a lot of value. Users are already paying - you can add a shiny feature or two every couple of months, but that’s about it.
I want to make it very clear that I am not at all anti-SaaS. There are areas where Software-as-a-Service (SaaS) makes sense. If I pay for cloud storage, like Dropbox, Google Drive, or any other provider, or if I pay for something that requires compute time and space then by all means I am happy to be constantly paying for it. I pay for ZenCastr to record my podcasts because it’s a great service and makes putting together a great interview easy. I pay for domains because I need to - regularly. I pay for my email service because I need a professionally managed and secure communications environment. I don’t want to pay constantly to burn a DVD on my desktop computer. Yes, that’s a thing.
Control the Distribution
By connecting everything to a central service and an account, it becomes much easier to control the distribution - that is, manage where software can and can’t be installed. I can see both sides to this - on one side, you want to have a viable business model through which you can sell a piece of $70 software and not have the same copy installed on 450 machines in some software development shop. On the other hand, this now means that I am entirely tied to an online service that I have no guarantees of existing in a couple of years, which would make the piece of software useless. That’s discounting for the fact that in many scenarios I want to use the software in an offline environment where there is no way to have it constantly phone home.
One of the more ridiculous examples here is Nero, who sell a “lifetime license” to some of their products, but still require a constant phone-home process to make sure that I am legally authorized to use the software. The moment you block their software and an insecure Node-based “launcher” to talk to the Nero service, it automatically blocks the user from launching and using the tools in the suite. Talk about not trusting the user right off the bat.
But just because there are good intentions behind this approach doesn’t mean that it’s good for the consumer.
Acquire a Continuous Stream of Customer Data
If data is the new oil, then a good chunk of modern software are super-powered drilling rigs. In the olden days (and I realize how that makes me sound) I could install a piece of software, register it online if I wanted to, and move on with my life. We all remember these prompts from EA when installing one of the classic games:
This was an entirely optional step that allowed you to get some goodies (like cheat codes or unique wallpapers) in exchange for your active email address. Opt-in process that I did not have to complete to play the game. Then, something changed. As more and more value was put on data, vendors realized that tapping into that stream costs next to nothing, with massive potential for revenue. Wouldn’t it be awesome to know everything there is to know about someone who is trying to edit their photo on their desktop computer? In addition to providing product insights, it can be a lucrative channel to understand whom to upsell on what, and we’ve seen that go horribly, horribly wrong.
I can’t speak for any software vendor and what they do with their data. But I am also not comfortable with it being collected for things that are, once again - not requiring data collection. Like playing an offline game. Or burning a CD or DVD. Nothing wrong with collecting bug reports or core performance metrics. On the other hand - times I use the software, what apps are running at the same time in the background, and other personal data should not as easy to collect from my own computer.
What’s The Big Deal
I talked about several implications to the “rented software” model, which include long-term cost and erosion of privacy. But there is another, slightly more obscure side to this - that related to ownership. Every commercial license I’ve ever seen is about offering the permission to use the software - that is, it’s not truly yours, you just happened to have a right given to you to use the software under the terms and conditions you agreed to. In most cases with classic tools that were shipped with perpetual licenses, that meant “buy once, use forever.” I certainly am not aware of anyone who had the Software Police bust in and take away a perpetual license they purchased years prior.
When you have a perpetual license, that means that as long as you have the installer and a key - you’re golden. You can install and re-install the software, you can use it for two or five years, and you can even re-sell it later if you have no use for it. The latter might be a gray area, but the best example in this domain is used games. If someone has no interest in their Nintendo 3DS cartridges or Xbox 360 games, they can just plop them on eBay or donate to the local Goodwill, where those will be picked up by someone who does in fact have an interest in old games. With the move to all-digital rentals, something tells me we won’t be seeing a vibrant used games market in 2030. Even a lot of the modern Xbox discs are no longer shipping with standalone games - they are glorified download links with an authentication token associated with them.
When, and it’s not a question of if but when, the servers that underpin the distribution and management of said software inevitably shut down, consumers will be left holding the bag - investing a good deal of money, with no way to re-download and use the software they might’ve been relying on for some time. Think of the Nero example I brought up earlier - given that I paid for a lifetime license, I expect it to work for, well, the lifetime of me or the computer I install it on. But what happens if their servers, that “verify” that I am still able to use the lifetime license, shut down, either because the company goes bust, is acquired, or moves on to something else? I can no longer use the software I paid for, and there is nothing I can do about it.
What Do We Do From Here
I am not the one to take a defeatist attitude when it comes to software practices. I think it’s on all of us to drive change, and there are many ways we can do that in. There are two big things that you can do today to shift the direction where we’re going.
First, you can vote with your wallet. Buy software and invest in software that allows you, the consumer, to have control of how long you can use it. Thankfully there are many solid alternatives to incumbents. I am a big fan of Affinity as an alternative to the Adobe suite of photo editing and illustration software. DaVinci Resolve is a capable alternative to Premiere. What I also do is tend to stick with tangible perpetual copies over account-tied ones. As I mentioned earlier, this is harder for some areas (such as certain console games), but in many cases it’s still a viable path for more continuous ownership of the copy. Buy a physical copy of games. Nintendo Switch cartridges can be re-used and kept independent of the console, while digital downloads are tied to the account. Tools like Axialis IconWorkshop allow you to download and keep the installer for as long as you need to without it downloading stuff from their online servers when you decide to re-install the copy.
Second - assess the long-term cost of the use and potential for future use. $10 a month might sound like a small amount, but how does it accrue over the expected time span over which you’ll be using the product? Are you running the risk of locking yourself in to something that might not be available down the line? Are you planning to enjoy the product in five years or more without a guarantee of the company or service existence? What’s the amount of money you make through the work created with the product? Not all subscriptions are bad - if you need something for a small project, or if you make more than what you pay for the privilege of using the tools then you might be OK to just pay the fee. Either way - don’t accept the status quo and be cognizant of the trade-offs.
And if you are a software vendor - just offer a standalone perpetual copy for what you’re shipping without tying it to some online service that’s going to go the way of Games for Windows Live, locking legit users out of your product. Sure, limit to how many years of updates you’re willing to offer, or only offer updates to one major version branch. Sublime sure has figured out a way to make this work - you can too! It’s absolutely abysmal that users of legally purchased software get a worse experience than those that obtain it through other means.
With the evolution of SaaS, things became more “SaaS-ified” even if they didn’t have to be that way, purely because it’s a way to make products more profitable over time through a constant stream of revenue rather than one-time variable payments. And while SaaS in on itself is not a terrible concept, its widespread use means that more and more we fall prey to rent extraction for tools that often provide marginal value compared to the long-term cost of use.
As time goes on, extraction of ever-increasing sums of money through software will continue. If video games are an indicator, with the rise of in-game purchases, the third re-release of Grand Theft Auto V, battle passes, in-game NFTs, and creative “pay to play” methods du-jour, there is no reason to think the same approach won’t embed itself into the tools we use day-to-day and go beyond entertainment.
It will be interesting to re-visit this topic in 2030 - almost eight years from now, and see in which direction our work has gone.