Subscription vs. Licensing for Barcode Scanning Solutions. Which is Right for You?

You’re tasked with finding a barcode scanning solution for your business, and you’re faced with a critical decision: Should you go with a licensing model or a subscription model? The choice is about more than just cost – it’s about flexibility, scalability, and long-term efficiency.

Maybe you’re worried about committing to the wrong model and system that doesn’t adapt to your company’s needs. Or maybe you’re overwhelmed by the jargon and complexities around these pricing models. You’re not alone.

In this article, we’ll break down the key differences between licensing and subscription models for barcode scanning solutions. By the end, you’ll have the clarity to choose the model that best suits your business.

What is the Licensing Model for Barcode Scanning Solutions?

A licensing model typically involves a one-time, upfront payment granting you perpetual software access. Think of it like buying a car outright: once you pay for it, you own it. However, there are additional costs for maintenance, upgrades, and support.

For example, with traditional barcode scanning solutions, you might purchase licenses for a set number of users and workflows. These licenses allow you to use the software indefinitely. But if you want updates, patches, or technical support, you usually need to pay an annual support fee (often around 20-25% of the original license cost).

If your business needs change—say you want to add more users—you’ll have to purchase additional licenses. This can become cumbersome and expensive if your company is growing or needs to scale quickly.

What is the Subscription Model for Barcode Scanning Solutions?

A subscription model, on the other hand, involves regular (usually annual) payments to access the software. You’ve probably heard of this referred to as SaaS, or, software as a service. It’s like leasing a car: you pay for as long as you need it, and upgrades and support are often included.

In the world of barcode scanning, subscription models offer flexibility. Instead of buying licenses for perpetuity, you pay for what you use each year. Many subscriptions, including ERP Suites Scanability, offer tiered pricing based on the number of users or workflows.

As an example, Scanability’s subscription model, which combines elements of the two models, includes:

• Core Plan: Up to 25 users
• Advanced Plan: Up to 75 users
• Unlimited Plan: Unlimited users

These plans bundle support, updates, and improvements into a single, predictable fee. This means no surprise costs for patches or upgrades.

Other barcode scanning solutions, like DSI (now known as Cloud Inventory), are more straightforward subscriptions. 

What Are the Key Differences Between Licensing and Subscription Models?

Let’s break down the primary differences between licensing and subscription models for barcode scanning solutions:

How Does Total Cost Compare Between the Licensing and Subscription Models?

With licensing models, your total costs come from the initial purchase and added support fees. With a subscription model, you can choose whatever kind of cost structure you’d prefer, depending on the features you want. 

The biggest differentiator between the two models is the support component. With licensing models, your support fees are all additional. You have to pay extra for the help you need to keep your barcode scanning solution running. With a subscription, that cost is included. 

Companies can reach a tipping point where the cost for one outweighs the other, all things considered. This is crucial for businesses to consider.

Because once you have the product, you need to put it to use. Implementing a licensed barcode scanning solution often requires significant upfront setup and customization. Updates can be disruptive and require IT resources.

In contrast, subscription solutions that are cloud-based make deployment quicker and updates easier. The vendor manages the infrastructure, so you don’t have to worry about maintenance. 

Consider this, too: The longer a barcode scanning solution takes to set up, the longer it takes to see results. A quick implementation on the front-end can save you time and money. Businesses should conduct a cost-benefit analysis to weigh each component of the process and evaluate the end cost. 

Is a Licensing or Subscription Model Model Best Suited for you?

In a licensing model, scaling up means purchasing more licenses, which can be expensive and time-consuming. If you experience rapid growth or seasonal demand fluctuations, the licensing model may not be ideal. Of course, you’ll need support whether you’re scaling up or staying as-is. With a licensing model, support is typically an add-on cost. If you skip support to save money, you risk falling behind on updates, security patches, and fixes. Rejoining support after lapsing can incur hefty back fees and penalties.

With a subscription model, you can easily upgrade to a higher tier as your business grows. This flexibility ensures you’re never stuck with an outdated solution. Additionally, support is baked into the subscription cost. With products on a subscription model, you get continuous support, patches, and updates without additional contracts or fees.

This simplifies your budgeting and ensures your system stays modern and secure.

Simply stated: If your business is dynamic, growth-focused, and wants predictable costs, a subscription model could be your winner. If you prefer a one-time investment and have a steady-state operation with minimal need for upgrades, a licensing model might be your solution.

Choosing a Barcode Scanning Solution Goes Beyond Subscription vs. Licensing 

The subscription versus licensing decision is just one of the many you’ll have to make if you’re considering switching barcode scanning solutions. Your next step is to understand other considerations that factor into this choice. 

Read about nine other reasons for switching your barcode scanning solution.