The software resides on your computer as do the main files. The gold service is a subscription service which allows for greater cloud storage of recipes and free updates to the software as they become available, regardless of the version, in exchange for a monthly fee. Basic (which I have), allows for limited storage of recipes in the cloud and free updates only within the basic version (3.x). Once Brad releases the next major update (4.x), I will need to decide if I want to upgrade or not and pay for the next version.