Subscription services allow organisations to benefit from new technologies and services without having to spend large amounts of CAPEX. It also allows them to scale up or down, which is invaluable for organisations facing seasonal demands.
Impact on the Channel
Subscription services generally work exceptionally well for channel companies because we’re all used to supplying services such as fixed line and mobile on a monthly recurring basis, often with some term discount to reward loyalty. The only channel business model that could get disrupted is traditional hardware and perpetual software sales funded by leasing.
Nowadays, many companies that would have had a PBX in their office and a bunch of servers, switches and firewalls in their comms room or data centre will likely have replaced everything with the private or public cloud equivalents.
In the mobile data world, we’re seeing a shift towards CPE as a service. This enabled, for example, many customers to deploy 5G routers in their networks where it would have previously been prohibitive due to the relatively higher upfront costs compared with 4G routers.
This is a win-win. The reseller gets a more valuable stickier solution sell than they might have otherwise enjoyed. The end-user gets the performance and productivity benefits offered by the latest 5G technologies.
The key trends that are driving subscription services are the ever-accelerating march towards digital transformation and the cloud. This has created a virtuous circle that means constant growth in customer adoption drives innovation which delivers improved services which drives more adoption.
The other side of this equation is that organisations are more reliant on their digital infrastructure and all professional services that provide peace of mind have never been in more demand such as 24x7 network monitoring and support and 24x7 security operations centre services.
Of course, these professional services are an ideal candidate to be delivered as a service. We have MSPs delivering managed network and managed security services on a per-user or per-device per-month subscription basis.
The best place to look for opportunities is always in your existing customer base. Seek out those customers that may have struggled to sign off on a project in the past due to CAPEX constraints but that could do using a purely OPEX model. Look for customers that have experienced rapid growth organically or have grown through acquisition, they will be facing technology and communications problems that you can help with.