As a Service

150 Million reasons the subscription economy is real

Amazon.com recently announced financial results for its fourth quarter ended December 31, 2019 – Source: The Information.

Amongst all the announcements is the staggering figure referred to in the title, in relation to Prime membership. From the announcement:

“Prime membership continues to get better for customers year after year. And customers are responding — more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world,” said Jeff Bezos, Amazon founder and CEO. “We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year. Members now have free two-hour grocery delivery from Amazon Fresh and Whole Foods Market in more than 2,000 U.S. cities and towns. Prime members watched double the hours of original movies and TV shows on Prime Video this quarter compared to last year, and Amazon Originals received a record 88 nominations and 26 wins at major awards shows. A huge thank you to teams across Amazon for their dedicated work to build, innovate, and deliver for customers this holiday.”

That’s pretty good affirmation if ever it was needed and more in the same vein in terms of As a Service updates that I am tracking below. That’s 20 more reasons its real 😁

  1. Retail subscriptions are here to stay. What can we learn?
  2. Making a success of subscription – playing the long game
  3. YouTube in Talks to Follow Amazon and Apple Into Video Subscriptions Market
  4. Ways auto industry can transform with As a Service and employee experience
  5. Zoba, A Harvard Spatial Analytics Startup, Offers Logistics-As-A-Service To All
  6. 3 Predictions for the Subscription Economy in 2020 – Zuora
  7. US mobile app subscription revenue jumped 21% in 2019 to $4.6B across the top 100 apps
  8. Get ready for the emergence of AI-as-a-Service
  9. Why You Need to Adopt Data Science and Machine Learning in your Customer Experience/Success Program
  10. Desktop-as-a-Service: Work from anywhere, on any device
  11. How the Platform-and-License Model May Outpace the Product Model
  12. Berlin-based Grover gets €250 million to blaze a trail in the electronics sharing economy
  13. Turners’ new car subscription service a sign of changing times, CEO says
  14. The engine of the subscription economy
  15. Prioritizing Customer Success Is Key In The Subscription Economy
  16. Moving from a legacy economy to a subscription economy
  17. CES 2020 preview: Even more streaming services and subscriptions on the horizon
  18. Will the XaaS economy create ‘Netflix for cars’?
  19. Subscription-based economy trends: business tips, benefits & examples
  20. Goldman Sachs is entering into the banking-as-a-service market

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As a Service, Future of Work

Ways auto industry can transform with As a Service and employee experience

The automotive industry is scrambling to transform itself in various areas: green (move to electric); smart (move to connected), etc. Much is being driven by nimble startups like Tesla, unencumbered by legacy concerns. This post focuses on two two areas that could further drive the turnaround and may be even more important because they are in white space.

Continue reading
As a Service

The engine of the subscription economy

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.

Customer Success

Customer Success Influencers

Not much elaboration needed but a few words just to be clear about what I am saying in this doodle:

  • These three elements of product, service and strategy are the biggest (but not only) influencers on the success enterprise customers have with the use of their technology. For instance I believe the sales process and what is promised has a huge impact too but not for this list.
  • I’m indicating with the size of the circles which ones I believe have the most influence.
  • The pull and push points relate to the nature of the influence on the use and ultimate success of the technology.
  • I think most of the items listed in each area are clear enough but if you are not on the job to be done point I added a link to a good explanation. And on professional services, by these I generally mean paid for services delivered by the vendor or partners and could include things like change management, training, etc.
As a Service

Update on As A Service Trends

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

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

Sense Making

Internet Trends and the impact on As a Service

Mary Meeker is famous for the insight of her Internet Trend Reports so of course I read them. Two slides stood out in relation to the trend I am tracking and the report I am working on. I captured my views with some annotations.

Sense Making

The end of ownership and the rise of usership

Foundations

NOTE: this post is made up of 3 pages so click through the pages at the bottom to get it in full.

To own or to use is not a new concept. I started grappling with this at least 12 years ago when I worked for a technology division at Sony and we developed a mobile music streaming service with Vodafone. That was in the day before iPhone was launched, before Spotify, when the iPod was on the rise. I remember the naysayers at the time saying, no one will pay a subscription fee for a mobile service for music they don’t own. CAN YOU IMAGINE THAT??? Check out the video I recorded of the service back in the day in case you don’t believe me.

Erich Fromm wrote To Have or to Be in 1997 – from the blurb:

To Have Or to Be? is one of the seminal books of the second half of the 20th century. Nothing less than a manifesto for a new social and psychological revolution to save our threatened planet, this book is a summary of the penetrating thought of Eric Fromm. His thesis is that two modes of existence struggle for the spirit of humankind: the having mode, which concentrates on material possessions, power, and aggression, and is the basis of the universal evils of greed, envy, and violence; and the being mode, which is based on love, the pleasure of sharing, and in productive activity. To Have Or to Be? is a brilliant program for socioeconomic change.

How does that resonate for you 22 years later, in this day and age?

As a Service, Customer Success

Update on As a Service Trends

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

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 😁