The world is changing from a “product” based goods/service market to a subscription based model. This trend has been growing exponentially since the mid 2000’s. In 2018, there are very few things you can not obtain and use from a subscription:
- Caterpillar (heavy construction equipment) now offers a service that shifts the discussion from “Products” to “Outcomes” based on the amount of dirt you want to move
- Cadillac, Hyundai, Porsche and Volvo all offer subscription programs for a car (This is not a lease)
- Stitch Fix – Clothing
- Graze – Snack food subscription
- My Royal Canin – Dog supplies
- Amazon Prime – enough said!
- Husqvarna – now offers battery powered tools in Europe on a subscription model
- Kanye West – First subscription album, “The Life of Pablo” sold billions of subscriptions
- Zipcar- to book the USE of a car and the ownership
- The New York Times – now generates more revenue from subscriptions than ads
- On and on and on…
The one industry that is most obvious is software. The majority of what we consume in the form of software (remember your “apps” are just software) is done through a subscription. But that transition was not as seamless or easy as you might think looking back. In fact, it took more than a model change…it was a massive philosophical shift.
In his latest book “Subscribed”, Tien Tzuo reminds us of the huge shift the market had to make from obtaining software via a perpetual license and the age of a CD loading on your computer to the current age where most software is subscription based…especially with the age of Cloud computing and SaaS based applications. Prime examples of this shift includes household names such as Adobe, Microsoft, Symantec and IBM. Part of this shift is not just to avoid producing a “product” but rather that IT buyers prefer an OPEX vs. CAPEX. In layman’s terms, organizations…including churches and not-for-profit firms…prefer an “operational expense” (i.e. subscription) in lieu of a “capital expense” (i.e. physical assets whether software or equipment).
As the subscription really started to take off, the term “beta” became common in the industry. This basically means your software was “almost ready” and they wanted clients to test drive it for final tweaks. Then, once the input was evaluated and implemented, the software was considered DONE!
That is changing as well!
On page 134 of Subscriber, Tzou conveys a story about Google and how for over 5 years their logo had the word BETA included. Google received a great deal of pressure from enterprise prospects and Fortune 500 companies that the word BETA was a roadblock for those who wanted to invest in a “beta” product. So in 2009, Google released a blog post saying it was removing the word from the logo. How ever, what is hilarious, is the last line in the 2009 release:
One more thing – for those who still like the look of “beta”, we’ve made it easy to re-enable the beta label for Gmail from the Labs tab under setting.
Google basically was saying that this little 4 letter word…means NOTHING to them. This was the birth of the “never-ending product.” Google and most other growing SaaS based products follow that…never-ending development…never-ending enhancements…never-ending improvements…never-ending listening to clients and prospects needs…always improving and never arriving mindset.
We too, at Cool Solutions Group and eSPACE adhere to this methodology. We will never “arrive” or be complete with development. There will always be more that can and should be done to assist organizations in being EFFICIENT, EFFECTIVE and INTENTIONAL with the facilities they are entrusted to steward.