As a Service

As a Service

The engine of the subscription economy

Stephen Danelutti Leave a comment

I read this article the other day: 4 Reasons Why Salesforce Could Acquire Zuora.

I’m writing this trend report: As a Service Trend.

Two of the chapters I will be covering are Subscription Economics and Technology Ecosystems.

Point 2 in the first article linked above gets to the heart of and intersection between these two chapters and this post is a way to explore the topics.

As mentioned in the article: Zuora is an enterprise software platform that helps subscription-based companies manage and bill their clients.

Its a pretty unglamorous part of the subscription economy, another reason that maybe their stock price is a little low.

But it is a very necessary part of the subscription economy, that’s why I used the analogy of the engine 😊 That is, technology platforms (or ecosystems) are the engine that drive the subscription economy.

Zuora have competitors and new ones entering all the time. WordPress (the worlds most popular content management system and blogging platform) recently announced they are going to help users monetise by offering subscription mechanisms.

Salesforce it seems, have their eye firmly on the space, adding credibility to the claim in the first article linked above. Check out this recent post on their site: How to Move to a Subscription Revenue Model.

From that article this diagram below, which they propose are the key business capabilities for supporting a subscription model. They may be business capabilities but look closely and they are all underpinned by technology functions.

From this you also grasp that moving to an As a Service business requires that the whole company shifts or refines its various functions in unison. In the article, Salesforce offer a three phase strategic roadmap for getting there which at best, is transformational.

I love that Customer Success is also represented in this framework above which I will be exploring in a separate chapter.

In conclusion, the articles and points they make and I discuss here are good indications that this trend is alive and well. Especially for SaaS businesses like Salesforce that focus on business-wide software, I think there is going to be increasing attention on this.

As a Service, Customer Success, Sense Making

The product customer success cycle

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This DanelDoodle pretty much speaks for itself but just a few added notes. The feedback loop is the critical element for success (aside from the obvious one – the customer/user being at the centre of everything).

A good feedback loop is not an easy thing to build so the simplicity of the diagram belies the effort. Feedback loops should incorporate many things, the most impart being, in summary:

  1. A good reporting interface into how customers and users are using the product that both product development and customer success teams have access to and share insights from in terms of how outcomes can be improved. This should include both quantitative data as well as qualitative, e.g. survey responses.
  2. A feedback loop between customer success teams and product development teams where the former bring field insights to the latter and these influence new feature development. Conversely, new feature ideas can be shared by product development teams and discussed with customer success teams before they are developed further. A good collaboration system will help with this.
  3. A similar reporting interface as above for the customer (those responsible for end users) so they gain insights into how the product/s are being used. This should include an element that allows the customer to build their own reports and feedback loops which I have hacked solutions around (covered here and here).
As a Service

Update on As A Service Trends

Stephen Danelutti Leave a comment

It’s been a while since my last update and there’s been lots going on so sit down, grab a ☕ and enjoy reading about a host of new announcements and articles capturing the trend.

Apple has just come out with some expected announcements that indicate it’s moving to an As a Service company which this post neatly captures: The Powerful SaaS Platform No One Is Talking About — and It’s Made by Apple. And in a separate post that is pretty much in line with the views from this first article: Hardware-As-A-Service: Are We There Yet?

This post similarly shows how another large technology company is leading the charge on this trend: Has Amazon Prime Been Fueling The Growth Of The Subscription Economy.

A great treatise here on the evolution of and critical foundations for successful SaaS businesses: What is Product Led Growth? How to Build a Software Company in the End User Era. From the article, these companies in the image below have recognised that we are in the End User Era, and they’re all-in on product led growth:

Here is a good post capturing various different sources and documenting the trend well: Riding on the wave of the “Subscription Economy”.

Another excellent summary on the state of the subscription economy is this one from Userlane, on the bell-weather company of the subscription economy Zuora and their annual event: Gaining Traction in a Subscription-Based Economy: Zuora Event Recap

One of the key factors I will be exploring in my new trend report is how technology ecosystems (including being/running a platform) play a vital part in the success of an As a Service company. That’s captured neatly in this move: Starbucks wants to create the AWS for restaurants.

In a continuation of the theme, you could easily see traditional SaaS businesses that touch parts of their customers core processes with their platform, especially financial or payments, extending their offering. Captured nicely here: Forget About SaaS: Software-as-a-Lender Could Be The Next Big Thing.

Something else that’s a key factor and I am exploring in my new trend report is being data driven and how good views on that data (analytics) is fundamental. A company nailing that aspect here: The Value of Usage Analytics in the Subscription Economy.

Here is someone else that sees the As a Service trend growing and touching all businesses and companies: The ‘As-A-Service’ Economy Is Moving Downstream. Are You Ready?.

And in a good review from the book Subscribed: Why the Subscription Model Will Be Your Company’s Future – and What to Do About It, by Tien Tzuo and Gabe Weisert, these two summary charts:

Other announcement from new entrants

As a Service, Customer Success

Update on As a Service Trends

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The latest and greatest posts and research on the subject and these are all being tracked with a tag here. I include Customer Success in this being a subset of the As a Service trend but I’ve added it under a separate section.

Customer Success

As a Service, Customer Success

Update on As a Service Trends

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Click to enlarge and view separately

I’ve not had a chance to post for a while and there has been a fair bit of activity in the space so I have quite a bit to share.

I have also run a few numbers through the data visualisation machine and come up with the infographic at left – feel free to use and share.

So herewith some of the best posts from recent weeks.

New SaaS Delivery Models Require New Customer Success Delivery Models. A solid piece on how Customer Success roles need to change in the maturing SaaS space. Sticking with the SaaS space, this article does a really good job of explaining how to manage your vendor if you use a SaaS product: How to manage SaaS Vendors in the Subscription Economy. And for some other really good posts on these themes:

New entrants to the space

These include:

This collection of announcements above 👆 shows the sheer breadth of industries effected by the As a Service trend – nothing is off limits.

Industry specific news

There were a batch of articles and new research:

Trend indicators

Here is a good summary of the trend which includes commentary on all the different industries being effected by the subscription economy: Subscription Services Draw Companies Closer To Customers. As with so many of the posts that I reference to the subscription economy, this one points to its darling Zuora, as you can see from the source of the chart. But their standing at the top of the subscription economy heap (as a company that powers the economy) may be under threat as new entrants join the fray: Stripe billing launches in Europe to power subscription companies across the continent.

There are other signs of a growing consolidation and integration in the Subscription Economy and Customer Success industries with the announcement by Medallia of their Strikedeck acquisition. Also Customer Success leader Gainsight’s announcement of the broadening of their portfolio into a “Customer Cloud”.

As a Service, Customer Success

Update on As a Service Trends

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Nuggets from the last few weeks. If you have any similar announcements, reports or good articles, please share in a comment as I’m collecting them for a new eBook / trend report 😁

As a Service, Customer Success

Update on As a Service Trends

Stephen Danelutti Leave a comment

As I think more about this whole space and track the developments in it with posts like this, I’m trying to envisage dynamics of the perfect business in it.

That gave rise to the DanelDoodle at left. Just some fun and very quick so not sure they are absolutely right. I’ll get a better feel for this as I complete my new trend report / eBook on the subject and it may become clearer and a little more scientific.

Anyway onto latest developments which is always the purpose of these posts in the form of announcements, articles, etc.

If you have any As a Service examples please share in a comment as I’m collecting them :)

As a Service, Customer Success

Update on As a Service Trends

Stephen Danelutti Leave a comment

When Ikea considers changing its business model then you know something is afoot. The big news this last week was Ikea thinking about making certain items available on a subscription basis.

Good article on that here where the screenshot at left is from.

It’s looking at doing so on a trial basis so this will be a very interesting one to keep track of and see how things progress.

Circular economy

That article linked to above points to the concept of a circular economy which I was not even aware of but should be in the context of the As a Service trend that this post is about. The pasted paragraph below from the article says it all:

When Amsterdam’s Schiphol Airport remodeled a terminal, it didn’t buy light bulbs; instead, the company signed a contract for “light as a service” from Signify, the company formerly known as Philips Lighting. Signify owns the physical lights, giving it the incentive to make products that last as long as possible and that can be easily repaired and recycled if anything breaks. The service is one example of a shift to a circular economy model. 

iPhone as a Service

I’m currently on Apple’s iPhone Upgrade Programme which in my view is its foray into the as a Service model. I captured how they are getting a little more tactical in my last Update on As a Service trends. Other than the obvious benefits they are targeting, that tactic shows how important it is to start treating your customers that sign up to a recurring financial commitment, with white gloves, so come time to renew, they do.

Volvo leading the race?

I cannot speak as intimately for Volvo’s execution on their subscription and as a Service promise but they are certainly talking a good talk. By all accounts they are struggling to keep up with demand. I’ve already written about my recent experience buying a car, which is all but a subscription service except in name. That experience is definitely not firing on all cylinders 😬

As a Service, Customer Success

Why customer experience and success share the same roof

Stephen Danelutti Leave a comment

There is a fundamental premise I make in the new eBook / trend report I am working on captured in the title.

Yet I’ve taken part in debates on LinkedIn that show there are divisions in opinion. Separatist thinking even.

Some think that customer success (CS) is the new kid on the block and muscling into territory owned by the customer experience (CX) brigade.

I guess it all depends on your background. Do you come from a marketing background where CX generally hails. Or from a customer service or account management background where CS hails.

I think it’s all rather pointless. I see the two as being inextricably linked.

The mother and father of modern views of the customer. Perhaps CX is the mother because in my view, CS is born of it, so to speak.

Some distinctions might be useful at this stage. These are mine:

  • CX is the sum total of interactions a customer has with a company and the net effect this has on the customer in terms of satisfaction and loyalty.
  • CS are the outcomes a company enables a customer to achieve through the use of its products/services.

CX is made up of many touch points that often transcend those of a CS team.

For example, pre-sales activities make CS hard if a product or service has not been sold right and perceptions between vendor and customer are misaligned on what comes after the deal is done.

CS teams are not always involved pre sales, at least in the early stages.

So its important those in sales are aligned to the right customer experience view and approach. They start the customer off on the journey after all.

In my mind, the best analogy I can draw between the two is that CX is the shell of the home with all of the feelings and emotion it engenders. CS is the different conveniences you find in it, the bathroom to clean yourself, the bedroom to get rest, the kitchen to feed yourself.

I’ve captured it in a DanelDoodle just in case it’s not clear with some other examples.

cx and cs house