ACT!’s Recent Move to Subscription Pricing – What does it mean to you?
Please note that subscription pricing only affects ACT! Premium. The lower cost ACT! Pro version is still sold as a perpetual license with optional support. ACT! Pro is limited to 10 users and this may be cut to 5 users.
“Do you purchase your car or lease it?”
Introduced in 1987, ACT! was one of the original Contact Manager / CRM products. Back then software was something you bought periodically. You started with a new license and then bought an occasional upgrade every few years to keep your software up to date and compatible with all of your other programs. Upgrades were really new versions offered to loyal customers at a discount, usually 50-60% of a new license.
Let’s say your software costs $500 new and upgrades were $300. Your software expense over time might look something like this:
Later, in effort to develop more recurring revenue, Companies like ACT! began offering maintenance and support plans that gave you each year’s upgrade and some telephone support. The plans were usually 25% – 35% of the list price. So your software spend could look like:
A little bit higher, but you were always assured of being in the most recent version and getting some level of support from ACT!.
Now, with Software as a Service (SaaS) or “cloudy” apps, you can sign up for software and pay a monthly fee to use it. Although ACT! is most often installed on your equipment, they have built in the ability to remotely turn ACT! on or off.
With ACT!’s new entry into subscription pricing, you have two options. The first is a perpetual license similar to what you have now. You pay $500 for the license which include 1 year of upgrades and support. After that, you have the option of renewing maintenance for $250/year. If you choose not to renew, you can continue to use your existing ACT license forever or until it is no longer practical.
The second option is always subscription. You pay $250/year every year. If you ever stop paying, your ACT! service is turned off. 10 years of ACT will cost your $2500.
There are discounts for quantities of licenses and for people who are upgrading. For example, a company with 10 users get a 5% discount and if they are currently on ACT 2013, v16 or v17, they get the service for $180.50/license/year. Their total cost for 10 users is $1805/year or $18,050 over tem years.
So, like leasing a car, you’ll probably pay more with subscription than you did with the old “Buy & Hold” ACT software of the past. The Buy & Hold model is no longer offered by ACT!. ACT! is no alone in this practice. You’ve most likely noticed that Microsoft Office is now on a subscription model. When Windows 10 comes out in 2015, you’ll see a lot more service based software.
There are wrinkles to the plan depending on what version of ACT you have, how many and whether you are on an existing business care plan. Also, if you host your own ACT or want a ACT! or another hosting partner to host it for you. So many wrinkles that we cannot explain them all. Please call us to review your situation and needs and we’ll work out the best solution for you.
In short, ACT! is now bundling their upgrades and support into their product, causing the price to rise. In the past, these services were optional. ACT! is still a fairly low cost CRM system. Consider Salesforce at $65/user/month or $125/user/month for the Enterprise version. Twelve/Three also sells other SaaS CRM products such as Zoho CRM. You have plenty of options with ACT and even with other CRM products.