Does the Software License Fee Matter?

Recently, I described the need to consider implementation costs when calculating enterprise software ROI. Implementation costs are a major variable in the ROI equation, since service expenses are often unpredictable. Non-license costs almost always represent a substantially larger expense than the initial license, so the impact on ROI can be significant.

So,what happens if the software license is actually free — should that be an inducement to buy a particular product? As if on cue, Techbargains.com points to a deal where one can get a free copy of Peachtree Pro Accounting, due to a rebate. Is this free license a good deal or not — in other words, should a free license persuade you to buy Peachtree software?

Short answer: if your financial and feature analysis of Peachtree points to the purchase, independent of the free license, then yes, take your free copy. Otherwise, don’t. Over time, the initial license fee as a percentage of total cost of ownership will decline. Such considerations as training, conversion, maintenance and support, and suitability to your business are where most dollars will eventually be spent. The free license will be small consolation if your business suffers because you chose the wrong software.

Most enterprise software costs are external to the license fee. Although these non-license costs are sometimes difficult to quantify, they are really where the software purchase analysis needs to focus.