Subscription vs. One-Time Software: What’s Really Cheaper Long Term?
- John W. Harmon, PhD
- Oct 3
- 5 min read
When small business owners weigh technology investments, one question comes up again and again: should you purchase software outright with a one-time license, or subscribe to it through a monthly or annual plan?
At first glance, a one-time purchase seems like the clear winner. Pay once, own forever, and no recurring charges. Subscriptions, on the other hand, can feel like a never-ending drain — another monthly bill stacked alongside utilities, rent, and payroll.
But is the answer really that simple? When you factor in updates, support, security, and productivity, the “cheaper” option isn’t always obvious.
In this article, we’ll break down the real cost of ownership for subscription-based software versus one-time licenses, explore the hidden costs that many small businesses overlook, and help you decide which option makes the most financial sense for your company.
The Basics: Subscription vs. One-Time Software
Before diving into long-term costs, let’s define the two models.
One-Time License (Perpetual License): You pay once, often a large upfront fee, and own the right to use that version of the software indefinitely. Think of classic boxed software like Microsoft Office 2010 or Adobe Photoshop CS6.
Subscription (SaaS – Software as a Service): You pay a recurring monthly or annual fee to use the software. The subscription typically includes automatic updates, cloud features, and ongoing support. Examples include Microsoft 365, Adobe Creative Cloud, or QuickBooks Online.
At first glance, one-time licenses look cheaper — one payment vs. endless fees. But cost-effectiveness depends on how long you plan to use the software, how important updates are, and whether downtime or security risks could affect your bottom line.
Upfront Costs: The Immediate Price Tag
One-time licenses usually involve a heavier upfront cost. A perpetual license for business-grade software might run from $400 to $1,500 per user. For a small business outfitting 10 employees, that’s $4,000–$15,000 upfront.
Subscriptions spread the cost over time. For example:
Microsoft 365 Business Standard is $12.50/user per month.
That’s $150 per year per employee.
For 10 employees, that’s $1,500 annually.
At first glance, if you keep the software for four years, the subscription costs roughly the same as buying outright. Beyond that, subscriptions may look more expensive — unless you factor in hidden costs like upgrades and downtime.
Hidden Cost #1: Updates and Upgrades
One-time licenses lock you to a specific version. Updates for bugs or security flaws may be included for a limited time, but major upgrades require new purchases.
For example:
If you bought QuickBooks Desktop 2018 for a one-time price, you likely needed to repurchase or upgrade by 2021 when Intuit discontinued updates and payroll support.
Each upgrade can cost hundreds of dollars per seat.
Subscriptions eliminate that headache. Updates are automatic, included in the cost, and available immediately across your business. No downtime, no upgrade fees, and no disruption when a new version releases.
Hidden Cost #2: Security and Compliance
Cybersecurity is no longer optional for small businesses. Outdated software is one of the most common entry points for cybercriminals.
One-time license software becomes obsolete faster than many realize. Without updates, your system is vulnerable. For businesses handling sensitive data — customer records, payment info, or contracts — that risk is unacceptable.
Subscriptions, however, ensure constant patching and compliance. Vendors like Microsoft, Adobe, and Intuit update their products monthly to fix vulnerabilities. For regulated industries, those updates are not just nice-to-have — they’re mandatory.
That means subscriptions don’t just reduce risk — they reduce liability. And the cost of a single breach (averaging $4.45 million according to IBM in 2023) dwarfs the “savings” of skipping subscription fees.
Hidden Cost #3: Productivity and Downtime
Software that “just works” saves money. Outdated one-time licenses often lead to compatibility issues:
Files that can’t be opened on newer systems.
Lack of integration with cloud apps or mobile devices.
Frequent crashes or incompatibility with updated operating systems.
Every hour of downtime costs small businesses hundreds or even thousands of dollars in lost productivity. Subscription software minimizes those risks with smoother compatibility and better integration.
Real-World Example: Microsoft Office
Let’s compare Microsoft Office 2019 (one-time purchase) vs. Microsoft 365 Business Standard (subscription).
Office 2019 One-Time Cost: ~$440 per user.
No upgrades included — when Microsoft releases Office 2022 or 2025, you must repurchase.
Security updates last only for a limited support window.
Microsoft 365 Subscription: $12.50/user per month = $150/year.
Includes Teams, OneDrive cloud storage, SharePoint, and constant updates.
Works across all devices seamlessly.
Over five years:
Office 2019 would cost ~$440 per user — but by year 3, it’s outdated and may require a repurchase (~$440 again).
Microsoft 365 would cost $750 per user, but includes ongoing features, security, and collaboration tools that prevent downtime.
The subscription is more expensive on paper but delivers more value and fewer hidden costs.
When One-Time Licenses Can Still Make Sense
To be fair, one-time licenses aren’t completely obsolete. They can still be cheaper in scenarios like:
Single-use software: Tools used infrequently or by one employee.
Niche or legacy systems: Software that doesn’t change much over time (e.g., CAD programs that still run well years later).
Tight cash flow situations: When a business can’t commit to recurring monthly expenses.
But even in these cases, businesses must weigh the risk of outdated security, compatibility, and eventual forced upgrades.
Beyond Cost: Flexibility and Scalability
Subscriptions shine in another area — scalability.
If your business grows, adding new users is easy and predictable with a subscription. With one-time licenses, you must purchase new seats upfront, which can be costly and time-consuming.
Similarly, if you downsize, subscription costs shrink with you. One-time licenses remain sunk costs whether you need them or not.
The Verdict: What’s Really Cheaper Long Term?
When you factor in upgrades, support, security, and productivity, subscriptions are usually more cost-effective long term for small businesses.
While one-time licenses may seem cheaper initially, they often lead to higher costs down the line through forced upgrades, downtime, or breaches. Subscriptions provide:
Predictable costs.
Continuous updates.
Enhanced security.
Flexibility for growth.
For small businesses juggling budgets and risk, subscriptions are not just cheaper in the long run — they’re smarter.
How Computer Solutions Can Help
At Computer Solutions, we help small businesses cut through the confusion and choose software models that maximize value while minimizing risk. Whether it’s setting up Microsoft 365, transitioning from legacy systems, or ensuring compliance with industry standards, our experts ensure your software investments truly pay off.
Don’t make the mistake of chasing short-term savings only to face long-term costs. With Computer Solutions, you get a partner who understands technology and small business.
Ready to evaluate your software costs? Contact Computer Solutions today and let’s find the best-fit strategy for your business.
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