We certainly thought Subscribed ’14 went well, and the press seems to be agreeing with us. In addition to this week’s earlier pieces from Forbes and Beagle Research, here are a few recent reactions from Fortune, CIO and Strictly VC:
By Michal Lev-Ram, Fortune Magazine
You’ve heard of the sharing economy? How about the subscription economy?
It’s actually not that new: Businesses have been selling monthly subscriptions for all sorts of goods and services for years—magazines like Fortune come to mind. But more recently, all sorts of unexpected industries have started dabbling in subscription-based business models, offering anything from online software to toothbrushes to genome sequencing for a flat monthly fee.
One of the companies leading this charge is Zuora, a Foster City, Calif.-based startup founded by former WebEx and Salesforce.com executives. The company sells software that helps other firms move towards a subscription-based revenue business model, including tools for billing, accounting and analytics. This week, Zuora unveiled the latest version of what it calls “relationship business management” software—a suite that lets companies transition and maintain a shift from a traditional to a subscription-based revenue model. (And yes, Zuora sells its product on a subscription basis.)
Tom Kaneshige, CIO Magazine
The era of subscriptions is upon us, and vendors courageous enough to adopt a subscription model for selling goods and services stand to pocket long-term payoffs in customer loyalty and recurring revenue.
That’s the message at Subscribed 2014 in San Francisco this week, a well-attended event with attendees evenly split among finance, IT, marketing and operations.
“In the last nine months, we’ve seen Adobe, Autodesk, even SAP make bold moves to pivot” to a subscription model, says CMO Brian Bell at Zuora, a Silicon Valley subscription-management software vendor that hosted the event.
Many signs point to a bright future for subscriptions. There’s the Internet of Things and wearables mega trends promising to open the floodgates to a myriad of subscription opportunities, such as health-related, auto-related and home-related services. Apple just bought Beats for $3 billion, not so much for the popular Beats headphones, rather Beats’ subscription-based streaming music service.
Connie Loizos, Strictly VC
Earlier this week, a group of CEOs, SVPs, technology strategists and the like gathered around a conference table in downtown San Francisco to discuss their companies’ respective experiences in switching to a subscription-based businesses. The move hasn’t always gone well with their customers or their sales staff, they openly admitted. But they argued that not only was the switch well worth it but that they increasingly had no choice. Below are some of their comments.
Mark Field, the chief technology officer of the life sciences company LifeTech, acquired earlier this year by Thermo Fisher Scientific on some of the challenges his business has endured in switching from a licensed to a subscription model:
“It’s not something that’s easy to change. And as we’ve been acquired, I’m hitting all those roadblocks again. . . Our go-to-market is completely different now, and on the sales side, this is disruptive, big time. If [salespeople] just sold software, it would a licensed sell, and they’d get their commission, make their number; now it’s a subscription. It’s a smaller amount over a long period of time. [The employee] may not even be around before we start to get the full value of that subscription. So we have to think about how do we commission them. . . It’s no longer a technology system issue; it is an organizational issue.”