products, software and annuity income

[Dave A]

Let's look at the main factors before trying to answer that:

How quickly will the equipment/firmware need updating to remain competitive?
How quickly will the equipment/firmware become obsolete?
Where is consumer resistance the bigger problem to overcome, on outright purchase or on "rental"?

As the client: If there is no real need to update I'd be resistant to ongoing fees - unless this made initial purchase more affordable.

I'd take a very close look at it from the client's point of view before making any decisions. I'm sure I'm missing angles, but perhaps a starting point.

[duncan drennan]

I think in general there are a couple of conflicting issues.

From a client perspective you want to have future support. In this particular case updates will probably only be needed when the client changes their particular system. Conversely on the business front you need the funds to maintain the firmware/software. If there is no money, there is no business, no business, no support for clients.

That's a bit of a conflicting issue for a client - they don't want to pay continually, but they do want future support.

From the businesses side having licensing/annuity income allows you to say hire a developer who continuously works on the product maintaining and supporting clients. This is a client benefit, but one that costs. The value for each particular client depends on their support requirement.

In a lot of ways it comes down to a balance between clients' willingness to pay an annual fee and projected sales.

Will the sales be high enough to support on going development and support, or will a fee be required to make sure clients get what they want?

On the other hand you have clients who are in most cases probably happier with a single initial purchase price, and that price has a limited range for market adoption.