Sage HRMS Moving to Subscription Pricing
Sage is in the process of testing the move of Sage HRMS Perpetual License to Sage HRMS Subscription License. They have not announced the date this will be effective yet, but some of you did receive notification within Sage HRMS. That notification was a test only.
So what is the difference? Will my software be in the Cloud?
Your on-premises installation of your Sage HRMS software will still be the same. This is NOT a change to move your software to the cloud. This is only a change in the license and billing. Your Windows-based modules will remain Windows-based (i.e. Payroll, HR, Alerts), and your browser-based modules will remain browser-based (i.e. Benefits Enrollment, Employee Self Service)
So why the change?
Sage is changing their licensing to reflect the current trend in the marketplace for software. They will charge a higher annual fee with lower upfront investment. Most all their competition is pricing in this manner.
What will this mean for you?
Sage has already successfully transitioned their Sage 100 Accounting clients to subscription pricing. Based on that roll out here is what you can expect. You will continue to pay fees at an escalating rate. Most subscription-based software firms cap their annual increases between 4 and 7 percent. Sage will continue to increase your current maintenance fees at a rate of at least 12% if they follow thier current increase and the model they applied to Sage 100. New releases will only be available if you are on Subscription Pricing at some point in the transition of current clients from perpetual license to subscription-based license. Ultimately it will make financial and functional sense to surrender your perpetual license and move to subscription pricing.
Do I have to move?
If they roll this out in the same way as Sage 100, you will not be forced to move initially. Over 18-36 months, it will make financial sense to move. We will keep you posted on the best time to transition.
What are my benefits with Sage HRMS Subscription?
As an existing client, the initial benefits are minimal. Over time, with new features only being introduced to Subscription, the benefits may grow depending on your specific needs. As a new buyer that is considering Sage HRMS, the benefit is huge. You can now purchase the software with a very small initial investment -- basically one year software "rental" or subscription.
What is the downside?
Our Sage100 clients reported frustration that their perpetual licenses were abandoned. They are now forced to pay the annual fee, or their software will no longer run. With HRMS, most clients keep their maintenance current to receive tax updates, which is less of an issue. However, if you are an HR only client, yo uwill have to pay the annual fee for your software to continue to run each year.