CA adopts subscription

Mike Simons

Computer Associates is to drop its existing licensing model in favour of a subscription-based approach.

The company,...

Mike Simons

Computer Associates is to drop its existing licensing model in favour of a subscription-based approach.

The company, one of the largest software suppliers in the world, claimed the move would offer greater flexibility for customers while also allowing CA to spread its income throughout the year.

The shift from an enterprise licence model to a subscription-based one will allow CA users to determine the length and value of their software licence and vary their software mix as their business and technology needs change.

CA chief executive Sanjay Kumar, said, "Our clients have told us they need more flexibility in how they license software, and a faster, simpler, more cost-effective way to do business with us in the new economy."

The move got a very cautious welcome from Phil Parkin, general manager for IT services at logistics giant TNT UK, which runs CA's Ingres 6.4 on more than 50 servers. As chairman of the Ingres Users Association Parkin has heard plenty of complaints about CA.

"There has been a lot of frustration with CA over licensing," he said. "Computer Associates has got beaten up so many times over licences that it has had to do something about it."

Parkin promised that UK users groups would keep a close eye on how the new licensing model developed.

In a letter to shareholders Kumar said the new business model would allow CA to "expand the customer base to include smaller enterprises".

Adrian Gonzalez, senior analyst at research group ARC, said, "CA is taking a page out of the ASP [applcition service provider] handbook. Although it will not be hosting applications, the company will be pricing software like many ASPs.

"Customers are demanding flexibility when it comes to purchasing software, and suppliers are looking to move away from unpredictable, volatile revenue models. Sooner or later, all software companies will have to make the change."

  • Cable & Wireless this week launched a programme that offers PCs software, network connections and services for a monthly per-user fee.

    IBM has also reacted to the ASP challenge with new licensing models for organisations of over 500 users. Last week it added an option to its PC leasing programme to allow per-user quarterly payments for hardware, software and services.

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