Not Just For Consumers: The Subscription Economy Changes B2B
As a consumer these days, it’s difficult to interact with a company that’s not trying to reach into our wallets every month with some kind of subscription. Whether it’s the promise of consumables like coffee and razor blades showing up at our homes as we need them, or more on-demand types of offerings for entertainment, transportation or some other kind of service when we want it, subscription models are seemingly more pervasive than ever.
The popularity of these consumer subscription models is rooted in two factors: access and efficiency.
In the business world, consumer subscription models are similar. For the last 30 years…businesses are entering a phase where, through subscriptions, cost-effective access to virtually unlimited resources is the new reality. That is, businesses don’t have to own the resources they need to enable their business, but rather can pay for efficient access to only the resources they need when they need them. This changes the rules of business operations entirely.
While this phenomenon is undoubtedly forcing a permanent structural change to business operations as we know it, the reality is that companies have been, perhaps maybe even unwittingly, moving in the direction of subscription models for some time. From office space and software to complete process outsourcing of things like customer service, finance and technology departments themselves, assets that are deemed non-core (for good or bad) have been systematically moved out of the companies’ operations and toward operational models that can more easily flex as business demands dictate.
What’s remarkable is that today, businesses are going well beyond these traditional subscription use cases. We’re moving at breakneck speed toward a business environment where just about anything that can be procured as a service is now procured that way. This concept of anything as a service (or XaaS) allows us to imagine a world where businesses can focus their limited resources on the advancement of their unique core competency, leaving other required functions to be serviced by a basket of subscription-based services that can individually scale and be paid for in an on-demand way as needed.