The IT Subscription Model

The Subscription Model is Here to Stay

14
Feb
Shackleton Technologies

Written by Shackleton Technologies, 14 February 2019

California dreaming

Everyone dreams of going to California, and we are no different. There is a prominent IT conference in San Diego this year which we are very much looking forward to attending. The prospect of some sun, sea and a gorgeous landscape thrown in for free, well it’s a no brainer! 

Looking ahead to our travel plans, I begin to think of the expense involved in getting there, however, as much as it will be a considerable investment, it is a positive one for our business. The world of IT is an everchanging landscape (e.g. AI, IoT, Cloud), so my theory is that we can't afford not to go! 

Surfing the web for prices, I came across Surf Air and thought about how the world of travel is also changing. You can now pay a monthly subscription for “all you can fly” travel. What a brilliant concept for all the frequent flyers out there. Is the whole world of business changing to the subscription model?

I thought this was a relatively new concept however the world of subscriptions has been around for centuries. According to Wikipedia, it all started in the 17th century by book publishers who made buying books more affordable for everyone.

Skip to the 21st century and the internet has fundamentally changed the way we do business. An example of this is Uber, who has a business model that provides taxi services but does not own a taxi. Last year, Uber displayed its creativity again by launching its Ride Pass scheme; a monthly subscription model based upon protecting customers against surge pricing at peak times and other in-demand times. It’s only the beginning but don’t be surprised to see this coming to a city near you soon.

The world of IT

How this relates to our world of IT is interesting as our industry is changing too. Our business discussion with clients focuses on the “price per month” as opposed to the substantial upfront investment costs. Although IT projects can be paid for in one go, leasing is increasingly becoming a more suitable option for clients.

Our pricing matrix is based around our monthly managed IT service. For a fixed fee, our clients will receive the advice and support they require, and we need to deliver value within that monthly cost. Everyone wins; our clients can budget for the fixed amount, and we have a regular income stream that allows us to plan for the level of services and resources that are required to provide outstanding service.

We also see this with the IT security and business continuity solutions that we offer to clients.  A few years ago, these products would not have been easily affordable for the SME marketplace. However, these world-class solutions are now attainable for small companies as a monthly fee replaces the large upfront payments. Our clients benefit from this arrangement through more flexible cash budgeting, greater security for their business and enhanced data protection.

The benefits of paying monthly

Microsoft’s Office 365 is now one of the most popular business software apps in the world. At one time, Microsoft Office was purchased off the shelf with one payment. We have seen clients buy tens of thousands of pounds in Office licensing in one go; a considerable expense for any company. Now, with Microsoft’s subscription model, these licences can now be purchased for a monthly fee.

Microsoft is smart, they know they will receive a regular monthly revenue stream, but at the same time, the purchaser of the licence will receive regular updates of the software as opposed to working with an out-dated version. Microsoft is actively encouraging everyone to abandon Office 2019 and to switch to their cloud-based Office 365 subscription platform!

The subscription model looks like it is here to stay. It has its critics but, when the mass population can afford to purchase some of the world’s most popular business products and services, you know it’s a winner. At Shackleton, we believe in this business model as we see the benefits for our clients. Providing affordable world-class IT solutions and services comes at a cost, but an affordable monthly one. 

So, when you’re flying on a private jet to California and working on your business using the Office 365 app, think of the subscription model. In business, we are all flying in the same world.                                                                                                                                                                                     

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