If the initial purchase meets the following criteria, it would be treated as an asset and depreciated:
It is readily available for purchase by the general public.
It is subject to a nonexclusive license.
It has not been substantially modified.
(If the software meets the tests above, it may also qualify for the section 179 deduction and the special depreciation allowance.
If you can depreciate the cost of computer software, use the straight line method over a useful life of 36 months).
(See Publication 946 at https://www.irs.gov/publications/p946/ch01.html#d0e202)
The annual subscription fee would be treated as an expense, a form of repairs and maintenance.
