Let’s start with some history, 1999 to be exact, salesforce.com introduces the concept of a web-based application that you do not host on premise, but it lives in the “cloud”. In 2002, Amazon introduced Amazon Web Service, the first big cloud computing provider. It took Google until 2008 to introduce its cloud offering.
Another notable milestone on this journey was Oracle and Microsoft starting new, cloud-based ERPs with NetSuite and Dynamics Business Central. Soon everyone was jumping into the cloud with their software offerings. It is a good thing, no more huge server room with windows that you parade visitors passed. A very vulnerable server room that if something happens to it, your whole operations grind to a halt. Now the processing and data storage are in “Cloud Campuses” scattered around the world with built in redundancy and guaranteed uptime.
Not only is it a good thing for the customer, but it is also an incredible thing for the software company. No more “one and done” sales of the product, with 10% to 20% annual maintenance and support fees. The customer pays for the product over and over again on a monthly basis. Residual revenue, mailbox money!
So, let’s start bringing this home. We at the EMP Tech Group are mainly a hardware and media company. Selling data collection hardware, label printers, along with the supporting services, and media that go along with these products. But we have always sold software, mainly label printing software, and almost always BarTender.
And we have always sold some sort of device management software. In the early days of Symbol Technologies and Motorola, they had their own device management software, but it only supported their own products. And Zebra has had printer management software for a long time that also only manages Zebra printers.
With the advent of Android and much more rapid OS updates, Zebra turned to SOTI and started selling the MobiControl product as their Device Management software offering. An on premise product for managing not only Zebra devices, but almost all mobile devices. Then in around 2018, SOTI introduced their cloud product. At first, they offered both cloud and on premise versions. Then they started to encourage all new customers to go with Cloud. They then started to limit the sales of on-premise sales. Now, they are starting to make the licensing of all new products subscription based whether it is on-premise or cloud based.
Because really, they don’t care where it is hosted, they just want to get the recurring revenue model of subscription based software. Most of the time, it is better for the customer if the product is hosted in the cloud, subscription based or not. But there are still many high security customers that demand an on premise version.
Now we have BarTender Cloud for label printing. NiceLabel was the first to introduce a cloud based label software package. It seemed to catch BarTender, and even Teklynx flat footed and behind the curve. But Seagull Scientific has caught up quickly with BarTender Cloud. The question will be how soon BarTender kills off all perpetual licenses and goes to subscription based for their legacy software products. Time will tell how this transition goes down.
Stay tuned, we will always keep you posted as these products evolve into their fully formed cloud versions.