PITTSBURGH -- Ansys is relying more on subscription licenses but doesn't plan to dump its perpetual license offering, company executives say.
The software developer has a new program in which it is trying to make it less expensive for startups to access simulation products for PCBs and other products.
"We're not trying to force that one way or the other. But as the market trends pick up, we're definitely seeing that," said Ansys chief executive and president Jim Cashman. However, he adds, the company is more worried more about "not creating barriers to adoption."
"We've always had a very strong subscription element" Cashman added. "Right now, we wanted to have the multiple avenues that allow people to adopt, because once they adopt our software, it's incredibly sticky and it stays and it normally is growth."
Ansys has seen its lease bookings rise in the high single digits over the past three quarters.
The accounting behind a lease is different from that of a perpetual license. Over a 12-month period, revenue from a lease might be half that of a perpetual license. Also, a given quarter might recognize only one-twelfth of the revenue of a perpetual license, dramatically cutting short-term revenue.
There are short-term risks to the subscription model, Cashman noted.
"Some companies that have really tried to push that model, they've actually seen declines in revenue and the like. ... [Y]ou can see the short-term impact that it had on some of the growth rates.
"If you think back to our business model that we put forth about 15, 20 years ago, it was really subscription before subscription was even called that. ... We've always been very open. Lease has been a big part, subscription has been a big part of our model for decades. And it will continue to be so. And as the market tends to shift that way, it will move that way."