Subscriptions are more than just flipping a switch

Software-based business is here to stay. Staying agile is key to adopting new models in an increasingly subscription-based world.


One of the great things about working in technology is the never-ending challenge of working in an industry that is continually shifting under your feet. Like navigating stepping stones across raging rapids, very real technological change drives the need to keep moving or perish. And, nobody loves to talk up the next wave of change like people in tech. Each one creates a fundamental shift that requires re-examining assumptions and re-thinking the art of the possible.

Right now, one of these waves is the shift to subscription-based businesses that is taking hold around the world. Make no mistake, the shift is real, but without some real thought around enabling these models for longevity, they may end up in the tech junkyard next to all the dot coms that failed in the 90’s. Building in that longevity is going to have to come from every aspect of your business, especially the way you develop your software.

The market landscape in the era of software-driven subscriptions should be eerily similar to the one that faced us when companies like Uber and Airbnb first appeared. Enabling access to a pent-up supply of just about everything turned out to be the first wave of what we now understand to be a perpetual wave pool of digital change, which will ultimately impact everything we do and how we do it.

Now, the subscription economy is set on rewriting the importance and even the attractiveness of permanent ownership in a world where everything can be rented. The Ubers of the world changed our views of apps, but the Rent-The-Runways and Spotifys of the subscription world are redefining something much deeper: the concept of “mine”.

There’s a subtle shift taking place from getting people’s attention (apps) to holding that attention (subscriptions). There will be two key determinants of the success of the new wave of subscription businesses: innovation and trust.

Innovation is at the heart of keeping the software you deliver to your customers fresh in every way, and underpinning that has to be modern software factory that can pivot at the drop of a hat – driven by real-time data about customer adoption and use, and powered by agility across every facet of your dev shop.

Not only that, but while achieving experience delivery may begin with a button that says “buy now”, the fabric of servers, databases, networks, and software that support that experience in the background need to be unassailable in every way. That’s the first part of the trust factor in the subscription equation – it’s not a product, it’s an ongoing 24/7 relationship.

The second part of trust has to do with the power of brand in a world where dead apps and fading tech darlings are quickly making users jaded about yet another “next thing”. The best way to stand out in a crowded marketplace is by having a recognizable, trusted brand with a track record of innovation and the ability to scale.

You might argue that the ability to scale is taken care of by the subscription model itself – that’s why there are so many new entrants because it’s easy to set up shop – but that’s only out of the gate. Getting your point-product subscription noticed is going to be pretty tough in a world where 500-pound gorillas like Apple and Google are using their brands to power their next business models.

Which brings it all back to the importance of having a customer focus and how you behave to inspire customer loyalty. There are lots of truly great companies that have been doing this for a long time now, and that will be their secret weapon as they move the products best suited for subscriptions to that model.

Subscribing to a product or service is profoundly different than downloading an app. It may be just as easy, but I would argue that it “feels” more committed – apps are like dating, and subscriptions are more like a serious relationship – and that’s where having a powerful, trusted brand will drive growth for many companies that have been around a while. But – and this is huge – only if they can retool their technology shops and processes (that modern software factory) to deliver a continuous stream of innovation to keep their subscriptions fresh.

There’s a clear window now for traditional businesses to make the shift, but they need to take a close look at their technology organizations and start retooling them to be agile and customer-centric. If they can reshape them to be built to change, then we may yet see the resurgence of some of the world’s historically great companies as powerful new digital competitors – on tap, for a monthly fee.

Copyright © 2017 IDG Communications, Inc.