We are at the end of our 5 year PTC contract and we are investigating converting from Perpetual to Subscription based licensing.
Are the Subscription based licenses still served from a license file managed by FlexNet like the Perpetual licenses?
Yes. Instead of the license file saying "perpetual", it simply has an expiration date for each entry. Keep in mind that with perpetual licenses you can run the software forever, even if you drop maintenance. With a subscription, when it's out, it's out. You can't go back and open your old files without purchasing a new subscription.
You should look at the cost going forward plus your investment in the existing licenses.
While the yearly cost may be lower, like Tom said, when the subscription is out, no more work can be done until you renew. There is also an annual renewal increase to factor in for future years.
If you already own licenses, then the yearly cost to continue with maintenance will be much less than switching to a subscription. If you're purchasing new licenses, the subscription cost will be lower initially but after a few years you will be probably be paying more (total) than what you would have with a purchase + maintenance.
If you want to be able to add and remove licenses (in one year increments), then a subscription can be a good way to go. If you don't have drastic decreases in your labor pool and want to spend the least amount of money long term, then perpetual licenses are probably the better deal.
I'm curious as to what has you thinking about switching? The main advantage to subscription seems t be in lowering the upfront costs, which you've already absorbed. I wonder what advantages do you see that I'm missing?
They have had perpetual licenses since the late 90's here where I am at. This year we switched to subscription. I would have preferred to stay at the perpetual licenses but the powers at be wanted to switch to the subscription. Yes there is the initial up-front cost savings and will pay more later. However, they also like the flexibility of removing or switching up the licensing if we need to.
We are getting ready to renew licenses that have been off maintenance for a year. Switching them to subscription is, frankly, much more attractive than I would have guessed. PTC is offering substantial discounts off subscription list prices (almost 45% off for us) for folks who've been off at least a year that make the annual subscription payment actually slightly less than maintenance on the perpetual seats. That discount remains as long as we keep the subscription active. Plus, we don't pay the back maintenance.
But, if we ever let the subscription lapse, we lose that discount. The increase for the first year, once they are re-started, wipes out over 80% of the savings from not paying the back maintenace. Every year on subscription thereafter is 60% more than the maintenance payments on our perpetual seats.
Ironically, the move to subscription makes sense in that scenario only if you assume you will never let it lapse.
And they also cap the annual increase at the lower of the CPI or 5%.