A perpetual license is one where a software application is sold on a one-time basis and the licensee can then use a copy of the software forever. The license holder has indefinite access to a specific version of a software program by paying for it only once.
The perpetual license normally applies to a specific version of the software product. It does not normally include subsequent software patches, fixes or enhancements, although in some cases the one-off perpetual license fee may include these items for one year or longer.
Historically, the perpetual licensing model has been very common as it is one of the original license models. However, software vendors are moving away from it, as there are more effective licensing models that allow software vendors to improve how they monetize their software applications.
For example, with subscription-based licensing it is easier for the user to start using the software as the initial cost is much lower than with a perpetual license. Another drawback of the perpetual license is that once the period where software updates are provided is over, the user often ends up with out-of-date software (which might have security issues). This outcome serves neither the customer nor the software vendor.
Want to learn about the other software license models that are better than the perpetual license? Check our Ultimate Guide to Software Licensing Models (2020).