Rubrik shifts from perpetual licenses to subscriptions
Rubrik
This shift turned Rubrik from a one time appliance seller into a recurring software company with a much clearer path to bigger contracts and better margins. Early on, customers bought a Rubrik appliance up front, then paid maintenance and services around it. Starting in 2019, Rubrik moved new customers to subscription pricing and cloud delivered products, which let it charge over time based on protected data and add higher value security and compliance features on top.
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The old model was hardware plus software sold in one large up front deal. Roughly 40% of revenue came from perpetual licenses, 40% from maintenance, and 20% from services, with customers often buying additional Briks as storage needs grew.
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The new model is mostly recurring. Subscription revenue rose from 39% of trailing revenue in 2020 to 86% in 2023, growing from $385M to $538M in 2023 while license revenue fell by about $100M since 2021. Rubrik also no longer offers new perpetual licenses and expected the transition to be largely completed by fiscal 2026.
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This follows the wider backup market. Veeam has also shifted to subscription, with 86% of revenue recurring, while Druva was built as cloud backup from the start. The common logic is that basic backup is becoming commodity software, so vendors need recurring software revenue and security add ons to stand out.
Going forward, the business should look less like storage infrastructure and more like security software. As more customers land on recurring contracts, Rubrik gets a steadier base of revenue and more chances to sell ransomware recovery, data governance, and other add ons that raise spend without requiring a new hardware purchase.