Software Licence Break-Even Calculator
Whether buying a perpetual licence with annual maintenance beats subscribing, over the years you expect to use the software — the year the two cross, the totals at your horizon, and the subscription price at which they tie.
A perpetual licence is a large payment now and a maintenance fee each year, typically 15 to 25% of the price.
How the software licence break-even calculator works
A perpetual licence is a large payment now and a maintenance fee each year, typically 15 to 25% of the price. A subscription is a smaller payment every year for as long as you use it. Early on the subscription is cheaper; every year the perpetual gap narrows by the difference between subscription and maintenance, and the cross-over year is the price divided by that difference.
The honest inputs are how long you will really use it and whether you will keep paying maintenance; many perpetual owners stop, and then the comparison changes again.
Formula: perpetual(t) = price + maintenance × t; subscription(t) = annual × t; cross-over = price / (annual − maintenance)
Worked examples
| Inputs | Cheaper over the horizon | Note |
|---|---|---|
| 12,000 perpetual against 4,800 a year, five years | Perpetual by 2400 over 5 years | perpetual wins in year 5 |
| A three-year horizon | Subscription by 2400 over 3 years | subscription wins |
| Cheap subscription | Subscription by 8600 over 5 years | perpetual never catches up |
FAQFrequently asked questions
Perpetual or subscription?
Perpetual if you will use the software for longer than the cross-over — the price divided by how much cheaper maintenance is than the subscription. Subscription if you will not, or if you value the flexibility.
What does maintenance buy?
Updates and support. Without it a perpetual licence keeps working but freezes at its version, which is fine for some tools and untenable for anything security-facing.
Why does the cross-over often land at four to six years?
Because vendors price subscriptions at roughly a third of the perpetual price and maintenance at a fifth. The gap closes at a seventh of the price a year.
Should I discount future payments?
For a formal comparison, yes — enter your cost of capital. It favours the subscription slightly, because its payments come later.
What is left out?
Price rises on renewal, the cost of migrating when a subscription ends, and the resale or write-off value of a perpetual licence. All real; all outside this arithmetic.
Where these figures come from
- IEC 80000-13 — Information science and technology (quantities and units) — the decimal (kB, MB) versus binary (KiB, MiB) prefixes used throughout
- RFC 4632 — Classless Inter-domain Routing (CIDR) — the address-plan arithmetic behind the subnet calculator
- RFC 1918 — Address Allocation for Private Internets — the private ranges the subnet calculator recognises
- NIST SP 800-63B — Digital Identity Guidelines, Authentication — length over composition rules; the basis of the password guidance here
- NIST SP 800-57 Part 1 — Recommendation for Key Management — key-strength comparisons used by the key-space calculator
- Australian Cyber Security Centre — Essential Eight — national guidance on passphrases and system hardening
Last checked: September 2026. Units follow the SI decimal convention (IEC 80000-13 defines the binary alternatives); network and security figures cite the defining standard.