Subscription Price Adjustment After 60 Months

At ScerIS, our subscription pricing follows a Structured Value Recovery Model – a pricing framework that gives organizations immediate access to our powerful software platform with no up-front license cost. Instead of requiring a capital expenditure, ScerIS recovers the value of the software license over time through a structured subscription. Once the license value has been fully amortized, typically after 60 months, the subscription is automatically reduced by 56%, reflecting the transition to a maintenance-only rate. While other vendors continue charging full subscription fees indefinitely and with annual escalations, ScerIS is the only company offering a model that intentionally lowers your costs once the corresponding license value has been recovered.

Here’s how the pricing works – both initially and after the 60-month amortization period:

Initial Subscription Price (First 60 Months)

For annually paid subscriptions, pricing is calculated as a percentage of the software list price. Specifically:

  • 46% of the software list price determines the annual subscription rate
    This 46% includes:

    • 26% attributed to the amortization of the software license
    • 20% attributed to ongoing software maintenance and support

This pricing model allows clients to effectively spread the cost of the software license over five years while receiving full support, updates, and enhancements throughout.

Quarterly and monthly paid subscriptions are also available.

Adjustment After 60 Months

After 60 months, the software license portion (26%) is fully amortized and drops off. At that point:

  • The annual subscription fee adjusts to 20% of the software list price, reflecting the ongoing maintenance and support only.

In other words, starting in month 61, customers stop paying for the license amortization and continue only with maintenance – a 56.5% reduction from the initial subscription rate.

This subscription price drop is automatic and dramatic, and is built into the subscription terms ensuring that clients are not perpetually charged for the core software component of their subscription.

Additions During the Subscription Period

Any additions to the subscription, such as additional concurrent users, modules, or other software components, begin their own 60-month amortization clock when added. For example:

  • A module added in month 24 of the original agreement will continue at 46% annually until month 84 (60 months later), at which point its pricing drops to 20%.
  • Thus, different elements of the subscription may adjust at different times, depending on when they were added.

This staggered structure ensures fairness and accuracy, with each component transitioning to maintenance-only pricing at the appropriate time.

Minimum Term Requirement for Maintenance-Only Pricing Adjustment

To qualify for the subscription price reduction that occurs once the license portion is fully amortized (typically after 60 months), a minimum subscription commitment of two (2) consecutive years is required.

  • Customers may begin with a monthly subscription at their discretion.
  • However, the amortization period (and the timing of the transition to reduced maintenance-only pricing) does not begin until a two-year subscription commitment has been made.  At any time, a customer may elect to enter into a two-year commitment, at which point the 60-month cycle will commence.
  • After completing the initial two-year term (whether for the original subscription or for any additional module/functionality), the subscription may continue on a month-to-month basis at the then-current subscription rate.  The amortization period continues uninterrupted during the month-to-month term, and the subscription will transition to maintenance-only pricing once the 60-month cycle is completed.

Maintenance Fee Adjustments Post-60 Months

The subscription fee initially includes both a software license amortization portion and a software maintenance portion.

  • For the first 60 months (5 years) of each subscription item, the software maintenance portion remains fixed at 20% of the software list price in effect at the time the item was purchased.
  • During this initial period, there are no increases to the maintenance fee.

After 60 Months

Once the license portion of a subscription item is fully amortized and the item subscription fee transitions to maintenance-only pricing:

  • The reduced subscription fee (representing maintenance only) becomes subject to an annual adjustment.
  • The adjustment is calculated based on the cumulative percentage change measured from the December CPI published in the year prior to the subscription start date through the December CPI published in the year prior to the 60-month anniversary.
  • That cumulative CPI change is applied to the ongoing subscription fee and the adjusted amount becomes the new base subscription fee starting in month 61.

Annual Adjustments Thereafter

Following the initial CPI-based adjustment at month 61:

  • The revised subscription fee is reviewed annually.
  • Each year thereafter, the fee may be adjusted by the percentage change in CPI from the most recent December CPI compared to the prior December CPI.
  • These adjustments apply only after the initial 60-month period has completed for the applicable subscription item or any additional module added to the subscription.
  • Customers will receive written notice of any adjustment prior to its effective date.
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