Peachtree 2012 Annual Report Download - page 24

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The subscription model
We are designing new pricing models to capture the value of the
evolving relationship we have with our customers. Subscription is
about serving our customers better through establishing an active,
broad based relationship with them and capturing the commercial
value of that opportunity.
We have moved with our customers, over time, from licence sales
of the core application to basic maintenance to premium support
and now to subscription. This is also the transition from a perpetual
licence to a monthly subscription.
Our customers are attracted to subscription because it is affordable,
exible and is an easier, lower risk decision. Both new and existing
customers will also get the best possible match between what they
pay for and the benets they receive. Subscription therefore allows
us to address a wider range of customer needs.
The move to subscription provides the opportunity for our partners
to differentiate themselves as well as help them to develop more
³
Our strategy continued
Core
application
C
o
n
n
e
c
t
e
d
s
e
r
v
i
c
e
s
Support Connected
services
Connected
features
Subscription
Connected
applications
Premium
support
Core
application
Basic
maintenance
Perpetual licence + service fee Monthly subscription
Core
application
Core
application
Subscription is the latest phase of the natural evolution of our customer relationships
active customer relationships. For many of our reseller partners
the move to subscription will be a big change. Where we are
introducing subscription we will work with our partners to ensure
they are appropriately incentivised under this new model. For
example, where we have introduced subscription in North America
we are able to offer our partners alternative commission structures.
Ultimately, for our partners and for Sage, subscription will lead to
higher, more sustainable revenues over time, with stronger, more
predictable relationships with our customers.
In the short-term, we will progressively introduce subscription
options for more products which will be offered alongside perpetual
options. In the medium-term, we will accelerate the subscription
rollout and make subscription the default option for key products.
In the long-term, the perpetual option will be phased out entirely.
22