[dropcap color=”white” background=”black” style=”rectangle” size=”big”]O[/dropcap]ver the last several years, we have watched many software companies struggle with paid upgrade cycles. As feature sets for applications have matured over the years, it has become harder and harder for companies to convince its users that they need the new features only available with the newest version.
For example, I am an amateur photographer. I occasionally need the power of Adobe Photoshop. I decided a long time ago, however, that I did not need to always have the most current version. To Adobe, I am a bad customer, as I am not supplying them with the necessary sales and revenue a for-profit company needs. If it were just me, the software companies would have nothing to worry about, but my choices with respect to upgrades have become very common, even among professionals.
Enter “Software as a Service.” This new model is slowly becoming mainstream, despite initial and continued resistance to the implied concept that we don’t own the software, but simply rent it. Microsoft Office and Adobe Photoshop are two major software platforms that are now available as subscription services with monthly or yearly agreements.
The sales pitch for “rental” or subscription software is that you will automatically receive updates as they are released, theoretically saving you money in the long run (based on the assumption that you would always upgrade to the newest version). Because this concept has not been a huge success, some companies have even stopped selling traditional software licenses to push customers to the new model.
Eventually, I need to bring the discussion back to a pharmacy focus. You see, Pharmacy Management System (PMS) software has traditionally leveraged a subscription model: You purchase the hardware / software and then pay a monthly maintenance fee for support and upgrades. This maintenance fee is usually non-trivial and can cost thousands of dollars a year for even a small volume store.
The other day, I was speaking with my PMS vendor about a feature that I would like to see. The support person indicated that they already offer that feature. I was ecstatic. In the next breath, however, the support person indicated that this was a separate service with a monthly cost. Wait just one second, don’t I pay a steep monthly maintenance fee for upgrades and support? Why is this feature not included?
Taking a step back and looking at the pharmacy software landscape, this model has gradually crept into the marketplace. Companies like Mevesi and Prescribe Wellness along with platforms like EQuIPP offer cloud based services that integrate and extend your traditional PMS. Each of these is adding to the pharmacy overhead when the service is added. Often these services can cost thousands of dollars per year.
Many of these service packages can add a great deal functionality to your pharmacy and may be well worth their cost(s). The concern for the pharmacy owner, however, is the rapid increase in software costs in an era where reimbursement for their service and product is at an all time low. Any new feature or service must be able to create more new revenue than the service costs the pharmacy. Today’s pharmacy owner has a fine line to walk.