I was doing the math on the licensing structure (we’ll go with the 1-CPU Enterprise license as this example).
I will start by saying that I realize it is in LiteSpeed Technologies’ best interests for you to lease your license from them as this gives them the most profit/income etc… where as an Owned license is generally seen as a larger up-front investment to reduce long-term costs.
I am also aware that I am comparing monthly lease to a yearly ownership as I am wanting to compare the extremes (smallest up-front investment vs the largest).
Owned licenses are an investment into LiteSpeed Web Server/Technologies and I always look at investments based upon how well they will return and how long until they return. A 39 month wait until the investment begins to return is a tad too long in my opinion and as you read on you will see the details of my analysis of their licensing program.
The primary problem that I see is that the Owned licensing doesn’t really reduce long-term costs fast enough – the argument could be seen either way that either the leasing prices need increased (sorry, have to share both view points) or that the owned licensing needs to be reduced either the initial purchase or the support renewal costs.
The price of a 1-CPU Enterprise Leased license is $32/month or $384 paid monthly for a year.
The price of a 1-CPU Enterprise Owned license is $41.58/month or $499 paid yearly.
At these prices you could have a Leased license for 15.6 Months for the price of an Owned license for one year – which makes sense if you think about it. At the end of the first year if you want to continue support and upgrades for your owned license you then have to pay $99 for a support renewal. You do not have to pay any such renewal fee for Leased license.
The price of a 1-CPU Enterprise Owned license for two years is $598 which would get you 18.69 months of Leased licensing – so after you have your owned license for over 18 and a half months you’ve broken even on your investment of an owned license. While a year and a half is not a tremendous amount of time – it is asking for a huge investment of your money up front. To make the Owned license an option you have to be willing to invest over a year and a half into LiteSpeed before you even break even.
After 18.69 months of being on an Owned license and having paid the $99 support fee after a year you will be at approximately $8.25/month for each owned license which isn’t terribly bad (a savings over leased of $23.75/month), but keep in mind it took over a year and a half to get to this point which leads me to my next concern.
The next major concern in my eyes with the current structure is that for the Owned license to “pay for itself” (to return on my original investment) which is one of the primary reasons I look at owned licenses over leased – it will take an additional 21 months for a total of 39 months before going Owned has “paid for itself” and returns on your initial owned licensing investment will be realized if you don’t include the support Renewals. The first and second renewal for a total addition of $198 because by this point you’re already at 39 months before going Owned has paid for itself.
Is it really intentional on the part of LiteSpeedTech to make an Owned license holder have to wait 39 months before they can start to see a return on their investment of going Owned?
What are your thoughts? Post comments!