Recently, Netflix has reported a sharp decline in subscriber numbers, losing 200,000 subscribers in the first quarter of this year, which some have interpreted as a direct response to changing consumer needs and interests. Could this trend be reflected in the corporate space, and will businesses be turning away from subscription services for accessing the latest technology too?
The answer is no. Business subscription services have become more attractive as we enter a period of economic uncertainty. What is key is how well technology as a service, or TaaS, is designed and offered to deliver the best possible value to the channel partner and their customers.
Subscription models offer businesses a way to harvest a long-term and financially valuable relationship with their customers. Whilst at the same time, their customers can benefit from improved budgetary management, and are able to access the latest technology.
The subscription economy represents a shift in how business is done. It offers flexible options for customers and allows businesses to continue to scale.
Subscription model demand
Businesses and their customers are looking for convenience, and a TaaS model provides just that. A TaaS model is an all-inclusive and single manageable solution, which combines hardware, software, and IT services into a simple subscription plan.
It gives customers access to the latest technology, while optimising their IT budgets, and consolidating their bill. A TaaS solution is not just for large businesses, small and medium sized organisations with tight budgets can also benefit.
IDC has forecasted that all subcategories of devices, including PCs, tablets, mobile phones, peripherals, and PC monitors, will have seen a combined year-on-year growth of 12.4 percent. For the channel, this provides ample opportunity to develop and modernise their business models and improve customer experience.
A TaaS model
The TaaS business model has clear advantages for all parties within the channel across different sectors including vendors, resellers, and all types of end-users. It is important for resellers to keep on top of technology changes which could benefit their customers.
The service offering provides great financial benefits and increases predictability for customers. It also enhances a businesses’ technology stack, by allowing them to access the latest technology as and when it is released. It is more likely that end-customers will commit to paying on a subscription model, compared to a one-off expensive purchase.
With flexible funding and financing packages, organisations with stretched budgets can make endpoint device upgrading more affordable. This model also combines training and maintenance into one package, so businesses are not expected to continue to spend.
Leveraging TaaS
The value that these models bring to resellers is essential. It allows them to grow their business and gives them a secondary source of income, they are able to combine hardware and services into their customer offering.
This not only helps resellers to offer businesses much needed technology; it also supports businesses when changing their business models to provide their customers with subscription services.
Some TaaS models even provide a platform that resellers are able to use to integrate into their online shop and ERP system, providing the sales and marketing tools required. These platforms provide fully automated and streamlined backend processes, making it accessible for all types of resellers, from sole traders to SMEs to corporate resellers.
Furthermore, building secure and long-term customer relationships is key for resellers, customers want simplicity when upgrading their devices. Using the TaaS platform, resellers can provide their customers with more accurate quotes, with no hidden extra charges.
It gives their customers predictability of costings and their technology update cycle. Nevertheless, using a subscription model changes the established customer relationships; sales and marketing is now ongoing, rather than one-off.
The future
There continues to be an abundance of opportunities for subscription services in the channel for resellers, vendors and end users, without sign of the channel experiencing a ‘Netflix Effect’. Especially with economic uncertainty and tightening budgets on the horizon, subscription models will become essential for businesses.
It is predicted that the subscription economy could be worth USD 1.5 trillion by 2025 as resellers are combining hardware with software and services into their customer offering. Using these models, customers can improve their technology stack, whilst offering budgetary management. For the channel, TaaS can create long-term and financially valuable relationships with customers.