Subscription models are on the rise - the separation of ownership and utility is the new norm

Charlie Spargo's picture
Sophie Morgan, HardSoft

Sophie Morgan is Head of Devices for Teams, HardSoft’s flexible DaaS solution for Apple and Windows devices. She explains how subscription and flexibility can enable your business to grow and improve your balance sheet. 

Flexibility in business has never been so important. Uncertainty and short-term changes dictate that businesses search for adaptable solutions. The volatile and dynamic environment impact decisions and force more scrutiny on the associated opportunity costs.

As businesses grow, traditional purchase models are being reevaluated. High upfront costs, depreciation and reduced productivity concerns are now real considerations as to why the traditional processes are being questioned.

One such modern process for growing businesses are embracing is subscription.

In our personal affairs, subscription has fundamentally changed the way we live our lives - our mobile phones, the way we're entertained (Netflix, Spotify, Sky), the way we shop (Amazon Prime), and soon, a choice of new car models.

According to Forbes, the subscription eCommerce market has grown by more than 100% year-on-year over the past five years - behind market leaders like Amazon pushing Subscribe & Save, while lending and making accessible their marketing platform to innovative subscription ideas like the Dollar Shave Club and Birchbox. 

Product ownership is increasingly seen as a thing of the past. Over 70% of international adults surveyed believe that a person's status is no longer defined by what they own. A similar percentage agree that subscribing to services frees them from the hassles of maintenance.The rationale for flexible subscription models in business is undeniable. 

Devices for Teams, HardSoft

Upkeep, upgrades, replacements, returns, outsourced service teams and significant benefits to the P&L and balance sheet are all tenets of these service solutions.

In uncertain times, flexibility is paramount. Purchase is a binary decision with downsides. The option to simply rent or subscribe to services alleviates the responsibilities of upkeep, having your cashflow slowed by your money being locked in assets, and the inevitable obsolescence of all owned equipment. Just look down the corridor and see that cupboard of old laptops covered in dust.

The relationship between ownership and utility has now separated. Using the service or product is much more important than owning it.

The responsibilities and costs of ownership are too big an opportunity cost to bear. The benefits of subscription we enjoy at home are transferring to businesses - direct access to services that sit behind the products we use on a daily basis: new shows or music on our phones, mobility from cars, Software from servers and the productivity from our laptops. 

HardSoft will sponsor the Prolific North Tech Dinner on November 14th in Manchester, where - as well as enjoying networking, drinking and dining with tech leaders - guests will be able to get a first look at the Top 50 Tech Companies.