Perpetual Money vs.

Perpetual License: Subscription, SaaS, and Perpetual Business Models

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Perpetual Model
Bookings
License 0.5 1.0 1.5 2.0 1.0 2.0
FYM 0.1 0.2 0.3 0.4 0.2 0.4
MR - - - - 0.1 0.2
Subtotal maintenance 0.1 0.2 0.3 0.4 0.3 0.6
PSO 0.3 0.5 0.8 1.0 0.5 1.0
Total bookings 0.9 1.7 2.6 3.4 1.8 3.6

Revenue
License 0.5 1.0 1.5 2.0 1.0 2.0
Maintenance - 0.0 0.1 0.2 0.3 0.3
PSO - 0.2 0.4 0.6 0.9 0.4
Total revenue 0.5 1.2 2.0 2.8 2.1 2.7
Growth 320% 120%

Subscription Model
Bookings
New subscriptions 0.3 0.5 0.8 1.0 0.5 1.0
Subtotal renewals - - - - 0.2 0.5
PSO 0.1 0.3 0.4 0.5 0.3 0.5
Total bookings 0.4 0.8 1.1 1.5 1.0 2.0

Revenue
New subscriptions - 0.1 0.2 0.4 0.6 0.7
Subscription renewals - - - - - 0.1
PSO - 0.1 0.2 0.3 0.4 0.2
Total revenue - 0.2 0.4 0.7 1.1 1.0
Growth 467%

Assumptions
PSO as % of license 50%
PSO conversion 85%
License bookings growth 100%
Maintenance rate 20%
Maintenance renewal rate 90%
Subscript as % of license 50%
Subscript renewal rate 90%
PSO as % of subscript 50%
PSO conversion 85%
All bookings last day of quarter
PSO converts in next quarter
Copyright © Dave Kellogg, Licensed Under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States Lice
3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

3.0 4.0 2.0 4.0 6.0 8.0 4.0 8.0 12.0 16.0
0.6 0.8 0.4 0.8 1.2 1.6 0.8 1.6 2.4 3.2
0.3 0.4 0.3 0.5 0.8 1.0 0.6 1.2 1.8 2.4
0.9 1.2 0.7 1.3 2.0 2.6 1.4 2.8 4.2 5.6
1.5 2.0 1.0 2.0 3.0 4.0 2.0 4.0 6.0 8.0
5.4 7.2 3.7 7.3 11.0 14.6 7.4 14.8 22.2 29.6

3.0 4.0 2.0 4.0 6.0 8.0 4.0 8.0 12.0 16.0
0.4 0.5 0.7 0.8 1.0 1.3 1.7 1.8 2.2 2.8
0.9 1.3 1.7 0.9 1.7 2.6 3.4 1.7 3.4 5.1
4.2 5.8 4.4 5.7 8.7 11.8 9.1 11.5 17.6 23.9
112% 108% 111% 108% 105% 104% 105% 104% 102% 102%

1.5 2.0 1.0 2.0 3.0 4.0 2.0 4.0 6.0 8.0
0.7 0.9 0.7 1.3 2.0 2.6 1.5 3.0 4.5 5.9
0.8 1.0 0.5 1.0 1.5 2.0 1.0 2.0 3.0 4.0
2.9 3.9 2.2 4.3 6.5 8.6 4.5 9.0 13.5 17.9

0.8 1.0 1.3 1.4 1.6 2.0 2.5 2.8 3.3 4.0
0.2 0.3 0.6 0.7 0.9 1.2 1.6 1.8 2.3 2.9
0.4 0.6 0.9 0.4 0.9 1.3 1.7 0.9 1.7 2.6
1.4 2.0 2.7 2.5 3.4 4.5 5.8 5.4 7.2 9.4
252% 185% 154% 158% 139% 127% 119% 120% 115% 111%
Share Alike 3.0 United States License
2011 2012 2013 2014

5.0 59% 10.0 56% 20.0 55% 40.0 54%

1.0 12% 2.0 11% 4.0 11% 8.0 11%
- 0% 0.9 5% 2.6 7% 5.9 8%
1.0 2.9 6.6 13.9
2.5 29% 5.0 28% 10.0 27% 20.0 27%
8.5 100% 17.9 100% 36.6 100% 73.9 100%

5.0 77% 10.0 67% 20.0 65% 40.0 64%

0.3 4% 1.5 10% 3.8 12% 8.4 14%
1.3 20% 3.4 23% 6.8 22% 13.6 22%
6.5 100% 14.9 100% 30.6 100% 62.0 100%
128% 106% 103%

2.5 67% 5.0 51% 10.0 46% 20.0 45%

- 0% 2.3 23% 6.5 30% 14.9 33%
1.3 33% 2.5 26% 5.0 23% 10.0 22%
3.8 100% 9.8 100% 21.5 100% 44.9 100%

0.6 50% 3.1 58% 6.3 48% 12.5 45%

- 0% 0.6 10% 3.3 26% 8.6 31%
0.6 50% 1.7 32% 3.4 26% 6.8 24%
1.3 100% 5.4 100% 13.0 100% 27.9 100%
327% 141% 115%
167.52

0.18
136.77