Are you looking for the right construction software to help your business run more efficiently? With so many options available on the market, it can be difficult to know which solution is best for your needs. Whether you are searching for a comprehensive construction management software solution or a more simple construction accounting tool, one of the key factors in making your decision will be the price.
Different construction software products offer different pricing models, and each pricing model has different factors that will impact the total cost to your business. Some software products are subscription based, while others offer a perpetual license. There are also free versions of some construction software programs (usually with more limited features), as well as open-source options. To complicate things more, exact pricing information can sometimes be difficult to find on vendor websites.
In this guide, we’ll discuss the various pricing models available when choosing construction software and provide tips on selecting the best option for your needs. We’ll also explore the pros and cons of each, as well as some often overlooked hidden costs associated with implementing a new construction software solution.
What Are the Different Construction Software Pricing Models?
As mentioned above, software vendors will typically offer a subscription-based pricing model or a perpetual license for their products. However, free and open-source software are also options to consider in certain situations. Because standard licenses (perpetual or subscription) are the most common options in the market, we’ll start with and spend more time discussing those.
Option #1: Perpetual License
A perpetual software license is a type of software pricing model that allows you to purchase the program once and use it forever. While the software itself can be used indefinitely, any upgrades, updates, or support usually must be purchased separately.
Perpetual licenses are commonly found in on-premise deployments (or installations) where the customer pays for a license to use the software on their local servers or desktop computers. Before the advent of cloud-based software, this was the most common type of software pricing model. Today, however, perpetual licenses for construction software are increasingly rare, as most construction software companies have moved toward subscription-based pricing models.
Factors Affecting the Price of a Perpetual License
When paying a one-time fee for a perpetual license, the primary factor affecting cost will be which software features are included with the license. A given software provider will likely have multiple license tiers or modules available for purchase. Lower-level tiers will provide basic features, while upper-level tiers will provide more advanced features in addition to the basic features offered through lower-level licenses.
With construction project management software, for example, the lowest level license might offer basic project management features or project tracking features only; whereas, the highest level license would also provide advanced features covering preconstruction, accounting, and analytics.
The other factor affecting cost with regard to perpetual licenses is how many licenses are needed. For example, when purchasing a perpetual license for a given construction software product, a customer may have the option to purchase additional licenses for use by employees or contractors in their organization. The exact cost of these additional licenses will depend on the software vendor and the specific licensing terms associated with their product. In some cases, an unlimited number of users may be able to access the product under a single license. In other cases, each user may need their own individual license.
Additional & Hidden Costs Associated With Perpetual Licenses
In addition to understanding how many licenses are required and what they will cost, it is also essential that customers understand the hardware requirements and any ongoing support or renewal fees associated with their perpetual license agreement.
One of the largest costs associated with a one-time software license (outside of the license itself) is supplying and maintaining the necessary hardware to support the software. If the customer is responsible for maintaining the hardware—as opposed to a cloud-based solution where the vendor maintains it—they will need to account for any hardware purchases, upgrades, or repairs that may be necessary to existing systems. This could mean purchasing new computers for employees, upgrading servers and other existing infrastructure, or setting up a new system from scratch. Businesses that go this route will need to set aside an appropriate amount of IT budget for these tasks.
Outside of the hardware costs, some vendors will also require customers to pay annual maintenance fees to receive updates, technical support, and other services related to their purchased software package. This is especially important for products like estimating software where the cost of building materials can change dramatically over time. Additionally, if your firm needs to customize the software in any way or integrate it with other systems, this will also cost more.
Customers need to factor these fees into their overall software budget when attempting to calculate a realistic estimate of the total cost of using a particular construction software product over time.
Pros & Cons of Perpetual Software Licenses
A perpetual software license for construction software can be a cost-effective option for companies that use the software frequently, need it for an extended period, and don’t need ongoing updates. While the upfront costs associated with a perpetual software license are usually high, in the long run, they can be a more economical solution when compared to subscription-based options in certain scenarios.
Below are the main pros and cons to consider when evaluating a perpetual license for your construction software:
- Cost-effective in the long term, as recurring costs can be lower
- The user has access to the software indefinitely
- Users can continue using the software even if the vendor goes out of business
- The upfront cost may be high
- Users may not have access to the latest updates or features unless they pay for them separately
- Users may not be able to get maintenance and support services after a certain period of time
- May not be flexible for companies with changing needs
Option #2: Subscription License
Cloud and subscription-based construction software pricing models are becoming increasingly popular due to their flexibility and potential cost savings compared to perpetual licenses. A subscription pricing model for construction software means that you pay an annual or monthly subscription fee to use the software. You need to keep paying the fee in order to keep using the software, but in exchange, you have immediate access to updates and many new features as they are released. You also don’t need to maintain the hardware that the software is hosted on. Instead, subscription software is typically accessed via a web browser or through an app on mobile devices.
This pricing model is more flexible and often more affordable than a comparable perpetual license that also has access to regular feature updates and support. It also allows users to only pay for the features they need and scale up or down as needed more conveniently. For these reasons, subscription models are especially popular among construction professionals in small and medium businesses who would have trouble affording the upfront costs associated with a perpetual license and whose business needs are likely to change more significantly over time.
Factors Affecting the Price of a Subscription License
The main factors affecting the price of a subscription license are similar to those mentioned above for a perpetual license—namely, the number of software features included, the number of users who will regularly access the software, and the level of support services provided.
Similar to software providers that offer a perpetual license, those that offer a software subscription will usually have various tiers, modules, or integrations that can be purchased. Lower-level subscriptions will provide more limited features while upper-level ones will come with more advanced functionalities. The same is true for integrations: entry-level subscriptions might offer fewer integrations than the more expensive subscription options.
Whereas with a perpetual license, the software vendor may allow you to only purchase a single license for your entire team to use, with subscriptions you will typically have to pay more based on how many people on your team have access to the software. Another variation on this is commonly seen in construction project management software pricing models where they will charge based on the volume of business run through the software. For example, Procore, which offers one of the most popular construction management tools on the market, will charge construction companies based on a percentage of their revenue.
Additional & Hidden Costs Associated With a Software Subscription
When compared to perpetual licenses, subscription software as a service tends to come with fewer hidden costs. For example, there are no additional costs associated with upgrading the software or dealing with hardware maintenance.
However, some subscription services may require users to purchase additional modules or integrations to access certain features that are released at a later date. Additionally, many vendors will have limits on how much data you can store or process without paying an extra fee. As a result, it’s important for companies considering a subscription-based construction software package to familiarize themselves with the details of their particular contract before signing up and make sure that they understand all of the potential hidden costs that come along with using the service.
Pros & Cons of a Subscription-Based Pricing Model
Subscription licenses offer many benefits, but also some drawbacks. Here are the top things for construction professionals to consider:
- Subscription pricing often requires a lower upfront payment compared to perpetual licenses
- Subscription pricing allows users to pay for only the number of users or features they need at a given time
- The cost of the software can increase or decrease as the user’s needs change
- Subscription software is often updated regularly, which can be beneficial for construction professionals who want access to the latest features and capabilities
- Subscription software requires recurring costs, which can be a significant amount over time
- Users do not own the software, they are only renting it
- If the user stops paying the monthly subscription fee, they lose access to the software
- Users may not have the same level of control over the software as they would with a perpetual license
Option 3: Open-Source Software
Open-source software is another option to consider. With open-source software, you get access to free tools and programs that can be modified to meet your specific needs. Two examples of open-source construction software are FreeCAD (3D modeling software) and OpenProject (construction management software).
When it comes to using open-source software in the construction industry, there are both advantages and disadvantages to consider. On one hand, open-source software is typically free to use and distribute, which can save construction companies money. Additionally, open-source software can be modified to suit a company’s specific needs and requirements and has a transparent development process that allows users to see the source code and understand how the software works.
However, open-source software may not have the same level of commercial support as proprietary software, and may not have all the features and capabilities of proprietary software. Furthermore, open-source software may require ongoing maintenance and updates which can be time-consuming and costly. Additionally, integrating open-source software with other systems or software may incur additional costs, and customization may require additional investment as well.
Option 4: Free Versions
Finally, some construction software vendors offer free versions of their products. Free versions are almost always limited in one or more of the following ways:
- Features and integrations: free software usually offers only basic functionalities, providing fewer features and integration than paid versions
- Access: free versions of software may provide access for only a limited period (i.e. a free one-month trial)
- Number of projects/documents: free software will often limit users by the number of projects or documents they can store in the software at any one time
- Number of users: software companies will sometimes give their product away for free for a limited number of users, but then charge more for additional seats
- Support: free versions of software often don’t come with live chat or phone support
If you are operating a small construction business on a tight budget, you might be able to get by using the free version of certain products. For example, STACK offers a great free version of its popular takeoff software. However, as your business scales, you should plan on having to pay for various software products, including construction accounting, project management, takeoff, and estimating.
How Much Does Construction Software Cost?
In the prior sections, we focused largely on how various pricing models impact the cost of construction software. This included what type of license is offered, as well as the factors impacting the final pricing of those licenses, such as the number of users, business size, advanced features, premium support offerings, and software upgrades/updates.
However, one of the most important factors impacting cost when it comes to construction software is the product type. Below, we list the most common types of construction software and what users can expect to pay for each.
Construction Management Software Cost
The cost of construction project management software can vary depending on the specific needs and size of a business. Many software providers offer subscription-based pricing, with basic options starting as low as $5 to $10 per user per month for smaller teams. As companies grow and require more advanced features, prices can increase, with middle-tier options ranging from $25 to $60 per user per month and top-tier solutions reaching up to $150 per user per month.
Some vendors offer alternative pricing structures such as flat monthly fees, which can range from $300 to $600 per month for more comprehensive packages. Enterprise-level solutions, which cater to larger businesses and include more advanced features, dedicated training, and support, can cost tens of thousands of dollars per year.
Construction Accounting Software Cost
For small businesses, general accounting software modified for construction purposes can cost less than $100 per month. For companies that require a dedicated construction accounting software product but do not need the full functionality of an enterprise solution, prices typically range from $100 to $300 per user per month, depending on the specific features purchased.
At the enterprise level, construction accounting software can cost tens of thousands of dollars per year. For example, Jonas Premier lists its prices at $20,000 for initial implementation and $199 per user per month.
Construction Takeoff & Estimating Software Cost
The cost of construction takeoff software can vary, with online products averaging around $85 per user per month and on-premise products costing an average of $975 for a one-time download with a perpetual license.
Construction estimating software prices also vary, with costs ranging from $30 to $250 per month per estimator. Some free tools and templates are available, but the best software comes at a cost. Online tools tend to have a lower monthly cost, while desktop tools that require a one-time installation are generally more expensive upfront, starting at around $600 and going up to over $5,000.
Final Words on Construction Software Pricing Models
While historically, on-premise deployments with perpetual software licenses were the norm, software-as-a-service (SaaS) subscription models have become increasingly popular in the construction industry. This shift has allowed companies to access higher quality and more feature-rich products, while also providing a predictable monthly cost that can be budgeted for more easily over time. While construction professionals will still be able to find some products on the market delivered via a perpetual license, most new software vendors have fully embraced the subscription model.
Because of this, the cost of construction software today depends largely on the size and needs of a business, as well as which type of product is being purchased. Smaller businesses may be able to get by with free versions of certain products or minimal purchases for basic needs. But as businesses scale, they should plan on allocating a budget for software. Fortunately, in the construction industry, the most popular software products on the market are well known to provide a positive return on investment for their customers.
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