The Subscription Model is the Future of Software—and for good reason

Microsoft recently announced the launch of Office for iPad. Many people took note about the pricing model behind Office for iPad: the apps are free to download, and the user can open and view documents, spreadsheets, and presentations for free, but must pay for an Office 365 subscription to edit these files. Many have taken notice.

At Microsoft, the move to a subscription-based model has been going on for some time. Office 365 was launched in 2011. With Office 2013, the move towards the subscription model has been consummated: a user with an Office 365 subscription can use click-to-run to stream any Office app on any machine, and has access to the latest bits of the software at all times.

Many in the tech community and elsewhere have met this move with caution or concern. At the heart of these concerns are two ideas:

  1. a subscription model to use the software, instead of being able to purchase it, means that we never really own the software we pay for, and
  2. a subscription model also seems like a way to bleed money out users, especially infrequent users.

These are legitimate concerns, but I will argue that out understanding of software ownership is outdated and harmful. Further, the financial concerns about software subscriptions can be mitigated.

It seems that it is fair to—and often, acceptable—to charge for a service on a continuous basis as it is being provided, but neither fair nor acceptable to charge a continuous fee for the use of goods, where one is expected to “own” such good. The renting of goods will come up as an obvious counterexample, but I suppose renting is an exception rather than the rule.

Software is seen as a good, and to pay a subscription for software exactly as an attempt to rent it out. Many will object to the business model of “renting out” software licenses because the use of software by one user does not exclude others. It therefore seems that renting out software is a greedy attempt at amassing profit, rather than a legitimate business practice.

But in this day and age, the use of software carries many hidden costs. A company must offer supports to users of software, including users who own older versions, or interoperate with other users who own older versions. A user could be complaining about a bug fixed several years ago, but if the user is having this problem, as a company, it is also your problem. A company could also choose to have strict terms of service and choose not to support some of these areas, but here we see another cost of having your old software out in the wild: its reputation.

Here, I hope an example from Microsoft software will be illuminating.

Case: Windows XP

Windows XP was released in 2001 and still commands a usage share of some 30% of traditional PCs today. Support for Windows XP has been extended multiple times since it was first slated to expire, but in April 2014, support for Windows XP will finally expire. This is good news for everyone in the tech world: a 13-year old operating system has no place in 2014.

30% of traditional PC users are currently using an operating system that is more susceptible to attack. Some team of programmers in Microsoft is writing software fixing bugs and closing holes in a piece of software written in 2001, when many of these bugs have been made irrelevant by new security models, access controls, and sandboxing techniques that their colleagues have developed years ago for Windows Vista, 7, and 8. Developers throughout the world need to make sure that their websites are compatible with IE6, 7, and 8, even though IE9 has been released in 2011 and support open web standards more properly than previous versions.

Windows XP costs everyone today. Microsoft especially sees issues: the reputation of IE has declined, many developers no longer support or attempt to use modern versions of IE because they have a negative impression of the browser. Customers compare a Windows XP netbook circa 2004 with a 2011 iPad and decide not to bother with Windows.

There is one “cost” that I have not mentioned yet, because I do not think it is a legitimate part of this debate. That “cost” is the cost of modern Windows licenses that could be sold to these PC owners. It is true that the biggest competition for a new version of Windows is the previous version of Windows. I will not concern myself with this idea as a justification for subscriptions; as users, it is not our job to accommodate our lifestyles to optimize a company’s profitability.

Therefore, I am building an argument that is quite straightforward: the continuous use of Windows XP costs Microsoft in real, meaningful ways, not only in opportunity costs of missed sales.

Many developers are horrified at the idea of anyone using Windows XP. Developers of course don’t care if those Windows XP users update their operating system to a newer version of Windows or a competing product.

These users, however, have purchased and therefore ‘own‘ the operating system. Imagine a washing machine maker going to your home and demand that you buy a new one: “It doesn’t need to be from us,” a representative would tell you, “you can buy any new washing machine, as long as it’s modern. This one is much too old and we can’t have you keep it.”

Enterprise users have more of a reason to continue using XP. The 30% usage figure, however, contains many home users of the operating system.

If we cling on to our conception of software ownership, then we really can’t demand anything out of these users. Maybe we should.

The Solution

The real solution to this problem is to rid ourselves of this conception of software ownership. It seems arbitrary at best to distinguish between software downloaded and running locally (“a good”) and software hosted on the web (“a service”), if the continuous use of both of them carries a similar cost.

A subscription means that you have access to the latest bits of the software you intend to use at all times. Third-party developers can count on the majority of their users using newer versions. The software maker will see a reduced need to support legacy formats, instead moving closer to (n) ↔ (n-1) compatibility guarantees. A subscription therefore means that development is more tractable, that users witness faster rates of improvement, and that software is generally more reliable.

Case: SimCity

Subscription-based models will also help speed up the advent of cloud-assisted and cloud-enabled software. When a user purchases a game or program, the user often feels entitled to the right of using this software offline. Developers who wish to be on the cutting edge are offering online-only options that are often being met with anger.

EA asked users to purchase SimCity, a game that required a continuous internet connection to be played. Users objected on for the following bases:

  1. the always-online requirement seems to be arbitrary and offer no real advantages that cannot be implemented in an offline-only version, and
  2. locking users into EA servers means that legitimate owners of the game will be left in the dark if EA decides to top supporting the game or close their servers.

I will not argue against the first point, other than to point out that other games could exist which legitimately take advantage of the cloud to offer superior online-only experiences. The real issue, however, is that users did not want to pay to own a game that they will not be able to use at some point.

The Big Picture: “Free” Software and Piracy

I am using “free” in quotation marks to refer to software that is “free (as in beer)” as opposed to “free (as in freedom)”.

My opinion on the EA and SimCity debacle is simple: EA should have offered SimCity for ‘free’, not purchase, and instead charged users a subscriptions to play the game. If EA ever shuts down its servers (as it often does), these subscriptions are terminated. The users got what they paid for (the use of the game for a given period) and we move on to the next innovation.

I will be the first to admit that this assessment is incomplete. It would be much preferable if EA opened up SimCity to allow other servers to spur up (at least if they choose to shut down the official servers). Whether EA owes this to the users, or whether it is simply a better alternative will be left as an exercise to the reader, and is definitely the next part of this debate on “free” software openness.

We are now looking at the big picture: in today’s world, buying, selling, and owning software are outdated concepts. Privacy advocates have long argued that the marginal cost of copying software is practically 0, and only potentially impacts software makers in terms of opportunity cost. Software is information and should be copied freely, they argue.

The subscription model ends the privacy debate. Companies should not be charging for copies of software, but the service of use and support.

What piracy advocates have noticed years ago is that software makers are charging for software illegitimately at the wrong stage of the development-distribution-use process. The subscription model admits this mistake and recognizes that the true cost of software—other than its development—is proportional not to the number of users using it, but instead the amount of user-hours the software is being used.

Does a future of subscription-based software mean it is more expensive for the user? I don’t think so. Companies should instead be expected to offer flexible options, such as day or week passes that should accommodate very infrequent users. We should demand that software makers provide affordable options: the cost of a one-year license to use a product should be significantly lower than the cost software makers currently charge to purchase a license indefinitely.

Simply put, charging users for a copy of an application is not the way forward for software. All (or perhaps most) software is a service that involves patches, updates, support, and more. A subscription-based model puts an end to many current-day arguments in favor of software piracy, allows software makers to innovate at a higher rate, and gives users access to the latest bits at all times.

Alhamdulillah – What one simple phrase tells us about Islam’s core conceptions of justice

I recently stumbled across a story from Jerusalem in the early days of the British Mandate of Palestine. Concerns over ethnic and religious tensions between the inhabitants of Jerusalem lead the British to restrict access to holy sites by religion. British guards were now seen in quarters of Jerusalem asking for the religious identity of the passers-by before allowing them in.

In front of the Dome of the Rock, a guard would stand and ask “Musliman?”—meaning, are you a Muslim?—and if the passer by is indeed Muslim, they would respond “Musliman, alhamdulillah.”—’I am a Muslim, thank God‘.

Alhamdulillah—‘thank God’.

I paused as I reflected upon this story, because suddenly I had saw new meaning in this simple phrase. A meaning I often glossed over. A meaning I might not necessarily believe, yet one I have come to appreciate.

The phrase Alhamdulillah is so ubiquitous in Arabic-speaking and Muslim-majority countries. If someone asks a Muslim during the month of Ramadan if she is fasting, her response would be in the affirmative, followed by that same phrase Alhamdulillah—’thank God’.

At a very basic level, the reasoning behind thanking God for the most mundane of things is a typical religious tendency. God is the purported creator, after all, and He or She takes all the credit. But in Islam, I think, being grateful to God for the most mundane of things is not simply about giving credit to the creator, but a reflection on Islam’s understanding of Justice and Moral Desert—an understanding which I think is quite beautiful, at least in this instance.

When a Muslim thanks God for being Muslim, she is coming to terms with the very fact that she could have just as easily been born a non-Muslim (which, depending on the Muslim you ask, means her chances at going to heaven are greatly reduced). To me, it seems that this itself is an acknowledgement that humans are not owed anything at all by their creator. If you are born into the ‘correct’ religion, you should count yourself lucky—nothing about you is inherently better than others, no God, nature, or society ever owed you anything. You mere birth did not entitle you to be born in that religion. You should be grateful.

You might not see the beauty that I see in this take on the world. You might feel I am making the world sound like a harsh, unloving space, where you are entitled to nothing and are owed just that.

To this, I argue that Nature is indeed harsh and unloving, and that it shouldn’t take long to see that. Whether famine, death, or war—the simple fact that bad things happen to undeserving people should be enough to convince you that good things happens to undeserving people as well. The mere fact of being born does not entitle us to any form of dignity that we should expect from Nature—only our fellow human kind.

Islam reminds its adherents, it seems to me, that they should be grateful for being born in the right place at the right time. That the mere fact that they were born into privilege doesn’t mean that they had been entitled to it.

This, I think, holds lessons that the rest of us could find useful as well: Distinguish Nature and the harsh world we live in from the kindness of humanity around us; Accept that while Human Dignity is important, it is a contract and a set of mutual expectations that govern the realm of relationships in the Human Sphere—and not our relationship with Nature; Accept that Nature and Misfortune can strike the most unsuspecting man or woman.

Even if you are not convinced by the philosophical implications of reflecting on the state of Nature and the harshness of the world, I think these reflections could at least inform us on some of the core teachings of Islam. Many who are unfamiliar with Islam, attempting to understand it from the outside, quickly become uncomfortable with its most basic doctrine of submission to God. Some feel this submission is contrary to many humanists notions of free will and self-determination. But submission to God in Islam should not be conflated with a loss of self-agency, instead a mere resignation to—or, lack of rejection of—the realities on the ground. It is not a call to inaction, but rather a reminder that good and bad things happen to undeserving people alike, and rather than demanding compensation from nature, you should do something about it.

Of course, it goes without saying that I am projecting many of my personal and philosophical beliefs onto Islam. Something which is especially dubious when taking into account that I am not, and was never, an adherent of Islam. Instead of taking this as an explanation of Islam, take it as one person’s account of Islam—and even then, only an account of an aspect of Islam. I simply offer an interpretation which I think is consistent, and one which I think at least some Muslims adhere to.

Whether this is an account of the real Islam, or an imagined clone, I think it offers a few insights that anybody could appreciate and find helpful: expect nothing from nature, work to make sure fellow human kind can expect something from you, and hope there is someone you could expect something from.

Disruptive Innovation: Amman’s Airport, Short-term Regressions, and Bright Futures

When they started computerizing the Jordanian passport issuing process, the “computer” line had a wait twice as long as that of the “manual” line. Today, no one could argue that we were better off with a non-computerized process for passports.

Queen Alia International Airport Overview

Folks, this is the future, and its for the better—like it or not. Transitions are never smooth, but if you think the new development is for the worse, you are decidedly mistaken.

Today, many are complaining that this huge investment is going to waste after witnessing some disappointments in the launch of the airport building. Luggage is arriving late at the baggage claims, people are being help up in security, and confusion is abundant regarding parking and transportation.

The old Airport

Truth is, huge transitions are always tumultuous. But the Airport International Group (AIG) has made a huge innovation, and they have shown (and are showing) great courage in their innovation.

There is something known as the innovator’s dilemma, and that can be explained as follows [1]:

  • A disruptive innovation initially offers lower performance than what the mainstream market historically demanded.
  • At the same time, it provides some new performance attributes, which in turn makes it prosper in a different market.
  • As it improves along the traditional parameters it eventually displaces traditional technology.

Examples of disruptive innovations are abundant. And I want to go over a few to make my point, then I’ll come back to the airport: Continue reading “Disruptive Innovation: Amman’s Airport, Short-term Regressions, and Bright Futures”

The Angry Arab Male: Where Democracy Fails

Today’s session of parliament in Jordan was an embarrassment—we saw typical examples of yelling over dialogue, insults over evidence, and anger over communication.

Whenever we witness the embarrassing behavior of our parliament, it is easy to think (or want to think) that such parliament could only be produced by corrupt elections, falsified votes, and manipulation from a group which wants a crippled parliament. We perhaps think that because it is too scary for us to even entertain the idea that we, the people, are capable of introducing—through popular will—an elected college of representatives that is as embarrassingly small-minded as these folks can be.

I do not believe this, and I think by ignoring the problem and waiting for a “proper election law” to come around, we would be overlooking the root problem of this small-minded violence.

To me, it seems very likely that the current parliament reflects the will of the people. After all, the embarrassing incidents in parliament mirror very closely other incidents of public violence that we witness–in particular, they mirror the unfortunate phenomenon of university violence which has been prevalent in many Jordanian institutions of higher learning in the last decades.

University violence and parliament’s small mindedness are both manifestations of the same problem of public societal violence. At the center of this problem is the “Angry Arab Male”.

The Angry Arab Male is an archetype prevalent in the Arab World of a man who thinks he has inherent superiority due to his genitalia. The Angry Arab Male believes power is more noble than intellect, a fist is more effective than a pen, and impulse is more important than thought. The Angry Arab Male likes to flex his muscles. He is always angry at others for insulting his imaginary ego and dignity, and retaliates by returning the favor. He is a believer that an eye for an eye and tooth for a tooth is the way the world ought to run.

The Angry Arab Male is more of a mythical figure than a common type of individual within society. But it is an archetype that romanticized and prevalent in the minds of many, as we look back to impressive figures in stories from older times, and the television of today.

The Angry Arab Male is Democracy’s biggest enemy, for his voice is always magnified, and his actions always poison the well for others. The Angry Arab Male is a poison that hinders our democratic development.

What is the antidote for this Problem? Truth be told, the Intellectual Arab Male can do very little. The only one who could really silence the Angry Arab Male is the Wise Arab Woman.

Over the past few years, we have seen an increasing number of female role models and public figures who have introduced a fresh maturity to politics and the public sphere. Ultimately, I believe it will be these women who will change the tone discourse in this country, and lead the boys to wake up from their cringe-worthy hissy fits.

 

[This post received a round of spell-checks after publication]

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