EF Johnson’s new perpetual-license model lets repeat customers save on radio software costs

Suzuki said the traditional LMR software-options pricing model can put customers in a very difficult position when something happens to a high-end radio.

“In today’s [LMR] model, with the software options, I could spend $3,000 on software options [for a radio],” Suzuki said. “If that radio got totally destroyed within the first 12 or 18 months of use, I’d have to replace that radio, and then I’d have to pay that $3,000 for the software again.

“We see a time in the market where those software options should not have to repurchased every time the customer replaces or updates its hardware platform.”

Suzuki said the new EF Johnson perpetual-license framework mirrors the pricing model used in the consumer sector, where software licenses

“In today’s world, with iPhones and Androids, it’s a consumer market where people expect to own software and refresh hardware,” he said. “The perpetual-license program is really a recognition that the marketplace has changed, and it’s time for the LMR market to catch up to the rest of the consumer marketplace.

“The customer pays for it once, but it’s an asset for him as he carries forward, and he doesn’t have to fact that same bill time and time again—and he shouldn’t have to, because that R&D has already been paid off from the industry.”

EF Johnson officials said that the company will maintain its prices on the cost of software as it is purchased initially, and that software licenses in the 10 features covered by the program will be treated as perpetual licenses immediately.

In addition, EF Johnson plans to expand the software covered in the perpetual-license program in the future, while continuing to develop new software-based functionality on its radio platforms.

When asked about the potential impact that perpetual-license pricing could have on LMR customers, Suzuki said it could be significant.

“There are about 500,000 or 600,000 P25 trunking radios sold in the U.S. annually,” he said. “If $1,000 of each radio was perpetual software, that’s 500,000 times $1,000. That’s the potential savings that the marketplace would save in buying radios on an annual basis.”

Suzuki noted that this widespread savings only would be realized if competing manufacturers also adopts their own perpetual-license pricing models. And that could happen, he said.

“By doing this and taking the first step, we are going to put a lot of pressure on our competitors,” Suzuki said. “The customers will recognize that we’re offering, and [other manufacturers] will have to respond. Now, the speed at which they respond is up to them.

“But, if they respond in kind, we will save the industry hundreds of millions of dollars that they’re spending today.”