SaaS or the beginnings of subscription-everywhere

Market: 
August 3, 2017

Today, you are most likely to buy online music, not a DVD. In the US, “physical music is hanging on life support,” writes the International Trade Administration, and even “digital music downloads are declining. […] Streaming will surpass downloads in 2018.”

Subscription-based models come with attractive benefits for consumers who, more and more, value experience over ownership. For a monthly fee, they can now rent pairs of jeans and rotate high-end models throughout their wardrobe – why would they purchase them instead?

Likewise, in the customer-centric and fast-moving B2B realm, the shift to subscription-based models is becoming a no-brainer for companies across industries and regions. Enabled by cloud, SaaS offers power a full spectrum of digital capabilities. Software can now be purchased on a subscription base, or paid for according to usage, and – most importantly – come with access to value-added services. Advantages range from empowered back office and easier management to better customer services. With novel customer experience, the relationship evolves and the end consumer can have their say.

SaaS comes with agile development, which in its turn helps “companies be more responsive to customers’ needs and requests. A bug reported by one customer can be fixed quickly—so efficiently that other customers accessing the same application don’t have a chance to see it or be affected by it,” explains McKinsey in its “From Box to Cloud” report. 

Compared to on-premise software, SaaS also enables publishers to release light versions of their products – within months, not years – in order to continually test and refine them. Developments factor in customer feedback in real time to adjust the functionalities to market needs.

Adopting SaaS is a painless affair. The learning curve is not so steep, reducing time-to-benefit, and initial costs are lower. Updates and upgrades are managed by the software provider without any customer intervention. Integration and scalability are a given. Turning to SaaS is a way to offload management of non-mission-critical applications, a Forrester Research survey found out, while the subscription-based model helps keep IT budgets under control.

Furthermore, “SaaS improves business results due to greater innovation and agility, and is increasingly the foundation for business opportunities,” adds the IT research and advisory firm. “If you aren't using SaaS broadly, your business risks falling behind.”

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