Unless you've got very deep pockets and an urgent need to drain the cash tank then it is always possible to finance an enterprise software purchase on what amounts to leased terms, thus matching cash flows with the tax benefits from a capital acquisition. That was always a bit of smoke and mirrors for high value items. One of the core arguments for switching from perpetual licensing to subscription has always been the opportunity to turn a CapEx item into OpEx.
The economics on our Tableau Desktop products are similar. However, in years two and three under the subscription pricing, we booked and recognized more than twice the revenue in each of those compared to the perpetual basis, $420 versus $200. In year one, we've booked and recognized less than half the revenue as compared to the perpetual scenario. And assuming the customer continues to renew, we go on and bill $420 per year in years two and three and recognize it as license revenue.Ĭarrying that math out, you'll see the overall effect on revenues and bookings. Now, under subscription pricing, we bill the customer for $420 in year one. Assuming the customer renews with us, we recognize $200 in each of the years two and three under the maintenance revenue line. On a perpetual basis, we would recognize the entire amount in year one as both license and maintenance revenues, specifically $800 in license revenue immediately and $200 in maintenance revenue recognized over the course of the year. The upfront cost is $420 compared to $1,000 on a perpetual basis. Our new subscription price is now $35 per user per month billed annually.
Let's take the individual user cost of a customer deploying Tableau Server as their analytics solution. Talking about Tableau subscription pricing, Thomas Walker, CFO said: The company was wholly transparent about how it is pricing, having fully switched to a subscription model. Tableau's latest earnings call was interesting in one specific sense as it relates to buyers.