Subscriptions typically turn large upfront software CAPEX into recurring OPEX for customers. Ensure the shift still wins on TCO, accounting treatment, and vendor‑lock‑in risk over the product life cycle.
Why do many buyers prefer SaaS subscriptions over perpetual licences?
subscriptions shift spend to OPEX and reduce large upfront CAPEX
they guarantee zero price increases forever
they eliminate all compliance obligations
they convert software costs into investment income
Under IFRS, a typical SaaS access contract is treated as ______ for the customer.
a purchased intangible asset automatically capitalised
a service arrangement expensed over the term
equity investment accounting
a finance lease of hardware
Which cost belongs in a realistic SaaS TCO comparison?
press release spend
office snack budget
employee commute distances
data egress and exit/switching costs
A finance team testing the shift to OPEX should model ______.
only first‑month cash outlay
payback period and NPV against a capex‑heavy alternative
brand share of voice
impressions and click‑through rate
Which accounting change in 2025 most affects internal‑use software capitalization under US GAAP?
mandatory capitalization of every SaaS fee
targeted ASC 350‑40 updates modernising software cost capitalization
removal of all software capitalization globally
IFRS 18 requiring capex for cloud access
A red flag when moving to subscriptions is ______.
portable file formats
SSO and open APIs
clear data export rights
vendor lock‑in that inflates future OPEX via switching barriers
For infrastructure moves, which statement is directionally true in 2025 market data?
many cloud migrations trade CAPEX peaks for steadier OPEX profiles
cloud guarantees lower cost in every case
on‑prem becomes OPEX by default
cloud spend becomes CAPEX under IFRS 18
Which item is most often expensed for customers in SaaS access deals?
recurring subscription fees over the contract term
the entire lifetime fee capitalised on day one
equity issuance costs
contingent consideration for acquisitions
When evaluating on‑prem vs. SaaS, a balanced case should include ______.
office amenities
only headline licence price
social media follower counts
security posture, uptime SLAs, and exit options alongside cost
If a team capitalises some implementation work for cloud systems, it should ______.
capitalise everything for simplicity
document criteria and separate capitalisable tasks from expensed services
expense everything to avoid audits
ignore documentation to move faster
Starter
You’ve got the idea. Now connect OPEX benefits to TCO, contracts, and accounting rules.
Solid
Good grasp. Tighten your case with IFRS/GAAP treatment and exit costs.
Expert!
Excellent. You balance cash‑flow, flexibility, and accounting impacts across the portfolio.
