Exclusive Fears that VMware's switch to subscription-based licensing would lead other vendors to follow suit may be coming true after Paessler confirmed to The Reg it has introduced new subscription pricing for its network monitoring tool, PRTG.

Paessler, based in Nuremberg, Germany, has been offering network monitoring tools for businesses from SMBs to large enterprises since 1997, the company claims on its website.

PRTG is designed for monitoring of the entire network infrastructure, and collects information from switches, routers, servers, and other devices plus applications. It is based on the concept of sensors, with over 200 different predefined sensors for applications and hardware-specific ones for switches, routers, and servers.

A concerned reader pointed us to a thread on the PRTG subreddit, which in turn pointed at a note on the website of German IT outfit Mekos (auf Deutsch), a service provider that resells Paessler. The Mekos post states that Paessler has now effectively switched users of PRTG to subscription-based licensing. As of July 1, it is no longer possible to extend the maintenance of a current license, as many users did every year, according to the IT firm's website.

But the stinger is that the prices under the subscription model are claimed to represent a significant increase compared with the earlier maintenance extensions.

Mekos says in its post that a license for PRTG XL1 (unlimited) previously cost €3,900 ($4,185) for a maintenance extension for one year, will now reportedly cost €8,800 ($9,443). It also claims that a license for PRTG 5000 (for large environments), which it claims was previously priced at €2,900 ($3,112) for a maintenance extension, will now cost €6,500 ($6,975). We asked Paessler for comment on its historical and new pricing.

It could be argued that services from the new subscription licensing include more value than what was given under the perpetual licensing deal.

Mekos recommended customers review their existing contracts, telling The Reg: "As an IT service provider, this transition and accompanying price increase significantly impact our operations."

Paessler confirmed to The Register that it had made a licensing move. "Yes, we switched PRTG Network Monitor to a subscription-based model," the company told us in a statement.

"We are doing this to accelerate our ability to continuously improve the product, maximizing the value it creates for our customers all around the world and to provide best-in-class support to further enhance customer experience."

"Moving PRTG Network Monitor to a subscription-based model means aligning the license models for all our products, thus giving our customers the ability to combine them in the best way to fit their needs and create competitive advantages in their industry," Paessler said.

The company pointed us to its pricing page, which indicates that the price for PRTG 5000 is now actually €10,899 ($11,696) per year, with all licenses sold as three-year subscriptions with annual billing. There are also cheaper packages for small businesses (PRTG 500, €1,649, circa 500 sensors), SMBs (PRTG 1000, €2,899), and medium (PRTG 2500, €6,099, c 2500 sensors) businesses on offer, as well as a very large environment package that's more pricey.

However, the freeware version of PRTG Network Monitor will still be available, limited to 100 sensors.

Some comments on the Reddit thread suggested that users were less than happy, and some expected to seek alternative solutions.

"We use[d] PRTG for monitoring for 7 years and it's been a very good product for us (MSP). However, they recently decided to ditch the perpetual model and switch to subscription-based licensing," one wrote, saying they planned to move away from the product.

Another wrote: "Dang, I just got my boss to get us a 3yr license and moved away from Check_MK. Guess we'll be back on Check_MK when this 3 yrs is up if nothing changes."

All of this will no doubt sound familiar to anyone following the saga of Broadcom's acquisition of cloud and virtualization giant VMware late last year, after which a "dramatic simplification" of the latter's product portfolio was announced, heralding the end of perpetual licenses and a move to a subscription-based model.

While Broadcom claimed that many users would see their costs fall because of the changes in licensing, it was simultaneously telling its shareholders that the changes were expected to lead to double-digit revenue growth for its VMware portfolio throughout 2024. Meanwhile, The Register heard from some customers that their bills had risen by 500 or 600 percent and license costs had jumped from $8 million to $100 million overnight.

As one Reg vulture commented: "Every other business software vendor in the world is likely therefore watching to see if Broadcom can meet its targets, because if it can others will surely be tempted to replicate its tactics."

Broadcom's Q2 2024 earnings showed that VMware's quarterly revenue had fallen by $600 million compared with the same period last year, but the company claimed that 3,000 of the 10,000 largest VMware customers have now signed for multi-year deals.

However, VMware has lost at least one large customer, Australian stock transfer company Computershare, which announced earlier this year that it plans to migrate 24,000 virtual machines from VMware to Nutanix. Last year, the prediction was that up to 20 percent of VMware enterprise customers would seek the exit this year. ®

https://www.theregister.com//2024/07/05/paessler_brings_in_subscription_licensing/