On July 12, 2017 PTC/USER hosted a call regarding the transition from Perpetual License to Subscription License PTC is rolling out. As a result of that call, input was formally collected and presented to PTC on September 20, 2017. The presentation and PTC's response are available below:
Thanks again to you, and the entire PTC/USER Board, for meeting with PTC in September. We appreciate the time you took to synthesize and summarize feedback from members of the user community about PTC’s transition to a subscription company. While we remain committed to this transition, we want it to happen in collaboration with, not at the expense of, our customers. Understanding the community’s specific concerns on this matter is instrumental to achieving that goal, so we will look to future Board meetings as our primary vehicle for gathering additional feedback.
As discussed, PTC’s transition to a subscription company – a move more than 80% of software vendors are expected to make within the next two years, according to Gartner – is well underway. We believe this business model provides customers with greater flexibility and more frequent product enhancements, while making PTC more competitive in the market.
However, we recognize that some customers have legitimate questions about what this change means for their business, and some may have received conflicting messages from PTC about the transition. In part, this was the motivation for PTC to establish a new Customer Success organization two years ago. Today, that team stands at roughly 1,500 employees and offers a wide range of tools and resources all designed to ensure our customers get the most from our software throughout the entire life of their subscription. We also created, and continue to update, the FAQ on this topic to address as many questions as possible.
While we offer incentives for customers to make the transition to subscription with us, those who have purchased software from us under a perpetual license have no obligation to convert to subscription. PTC is committed to protecting the investment those customers have made by continuing to provide support and updates on the software they purchased. PTC customers who have questions or concerns on this topic should feel empowered to contact PTC’s Chief Customer Officer Paul Lenfest directly. Lastly, we recognize that some customers may be concerned that PTC hasn’t renewed certain discount arrangements customers may have received in the past for perpetual licenses and support. For FY’18, we have increased pricing for support for perpetual licenses by 4%, and will continue to set support pricing annually based on the on-going costs of providing support and competitive market dynamics.
We genuinely believe the subscription model is better for both PTC and its customers. That’s why we are building so many incentives designed to accelerate time to value for customers to make the switch. For example, for those unsure about the transition, we offer the opportunity to “test-drive” the subscription model by adding new subscription licenses that can run simultaneous with perpetual licensed software.
That said, we recognize that PTC has not always spoken with one voice to the market on this topic. To remedy this, we are increasing our internal training and awareness programs to ensure questions are answered quickly and accurately. We continue to examine our business rules, processes, and systems to simplify the administration and management of subscriptions. And we have updated our FAQ to ensure that the PTC/USER Board has a formal response from PTC on the top concerns you shared with us.
We are committed to our transition to a subscription company. But we are also committed to leveraging our regular PTC/USER Board meetings as a vehicle for ongoing dialogue on this topic. We’ll work together to ensure we all make the transition as smoothly as possible, and that all customers are treated with the respect they deserve.
SVP, Corporate Marketing