Rethink Commerce Blog

Changing an Industry – One Subscription at a Time

Posted on May 31st, 2012 by
Last week we had a conversation with Peter Cohan from Forbes about how Avangate is changing the way software is being sold. We’re long past the times when customers went to physical stores to purchase new software and upgrades. The software industry today is highly driven by the adoption of cloud computing, and consumers are expecting to have access to products and services online anytime. More than that, usage-based models are increasingly preferred to pay-upfront models, and try-before-you-buy plus freemium software products are anything but a novelty. What that means for many vendors is that they need to deploy their products fast, experiment with new models, and expand their reach in order to stay competitive.

After all, when talking about the online software sales market, we’re really referring to a massive, $55 billion global industry who’s only constant is change. In order to stay profitable in this environment, companies must change too.

In this day and age, software vendors have to create a constant dialogue with their customers and ensure that they create an enduring relationship instead of a one-time purchase. A helping hand is given by automation tools, subscription management (including self-service options for renewals, upgrades, downgrades, migrations and proration) and behavioral analytics to assist with servicing the customer along the entire product lifecycle.

The shift to SaaS and subscriptions has also created quite a stir among the reseller and channel sales communities. Many are asking if subscription-based products have removed the need for the channel altogether, but the truth is that the channel, admittedly transformed, still has an important role to play (some hints on that in this blog post).

No matter what phase of transition a software business is in – legacy-only, partial-SaaS, or full-SaaS – vendors have to reevaluate their business model and whether they are able to reach the right customers, at the right time via the right platforms. And while there is no “one size fits all” and vendors need to test & experiment, what is clear though is that subscriptions are here to stay in one form or another, and are redefining how software is sold.

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Delia Ene

Communications & AR Senior Manager

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