Print IT Reseller - issue 60

01732 759725 28 SUBSCRIPTION ECONOMY There is always the danger of course of organisations trying to make something ‘as-a-service’ that doesn’t necessarily warrant it Pay-monthly or pay-as-you-go pricing models are not a new concept. As consumers, we rarely own our mobile phones, opting instead for pay monthly contracts which in most cases eliminate the need for upfront investment. We stream unlimited music and movies via subscriptions to Amazon Prime, Netflix and Spotify and procure products/services from companies such as JustEat, Uber and AirBnB, as and when we need them. In business, the leasing model for print and MFP purchases is long established, but taking that one step further, the idea that organisations don’t need to physically own all of their technology is catching on too. Carlo Longhi, Director and General Manager, Indirect channels UK and Ireland, Xerox, says that the ‘everything- as-a-service’ trend is undoubtedly being driven by the consumer world, whereby we procure either via a set monthly subscription, or on an on-demand basis. “As consumers we have become increasingly attuned to the simplicity of these models at home, business buyers now want to replicate these methods at work. Previously businesses had to procure everything they needed outright – they’d buy a printer then pay for toner, buy a laptop and then have to buy a Microsoft Office licence or buy a smartphone and pay for data and calls,” Longhi said, adding: Nowadays, The subscription economy is gaining traction across all sectors – and is no longer the exclusive purview of the B2C sector The subscription economy: not just for consumers businesses want to procure on a usage basis which is billed as a per user quantity, without the need to necessarily own the asset outright. This involves a per user model inclusive of printed pages, mobile data and online storage which then allows for a modular or scalable variation, allowing to expand or decrease based on workforce size, or even add/ remove components on a per need basis by department/team/location.” James Turner, Regional Sales Manager, Y Soft concurs: “Most commodities and services are available paying a monthly subscription; TV, Insurance, Amazon products, home improvements and so on,” he said, adding: “People are used to adding smaller costs to monthly budgets so why should business costs be any different?” Tony Milford, Managing Director, Vantage Computing says that the benefits of lower cost of entry, lower CapEx, easier scalability, multi-tenancy and device and location independence, are potentially a win-win for vendor and client alike. “The world is tuned in to spreading costs over time, and happy to pay a little extra for this benefit. In the business world, paying on a monthly subscription model often turns what would be a capital expense into an operating expense,” Turner said. “This also makes it easier for businesses to adopt new technology as the cost barrier and lengthy approval process are eliminated.” Products as-a-service PAE Business is one firm that sees the benefits of providing products as-a-service. The PAE Premier model is built around providing all products as-a-service. “We launched Premier in 2012,” Managing Director Phil Madders, explained. “Once we had got through the painful experience of losing the large chunks of revenue coming in when we won a sale and completely migrated to providing our products as-a-service, it has become a fantastic platform for our business and for our customers to develop their ‘everything-as-a-service’ offering.” Madders argues that vendors should not ignore it: “Embrace it and include it in your business plan going forward,” he said. According to John Gifford, Founder & Managing Director, Fiducia Strategic Consultancy, whether vendors like it/ agree with it or not, the ‘as-a-service’ economy is too big to ignore. “Looking at the past 12 months within EMEA as a whole for example, traditional outsourcing fell nine per cent year on year to € 12.9bn, while ‘as-a-service’ outsourcing rocketed 48 per cent to hit € 4.9bn. Although not directly linked to hardware as such, it is very indicative,” he said. “The growth rate is very high which naturally means adoption is too,” Gifford continued. “There is always the danger of course of organisations trying to make something ‘as-a-service’ that doesn’t necessarily warrant it, but you cannot deny the facts of the market.” The debate is long over Gartner argues that the debate about whether the software industry will move from a traditional license and maintenance model to a subscription- based model is long over. The analyst firm reports that there is now widespread adoption of software-as-a- service (SaaS) and that many traditional John Gifford Carlo Longhi