Driven by a social shift from ownership of assets to the benefits of the asset.
SUBSCRIPTION BUSINESS MODELS ARE DRIVING THE EMERGING CLOUD ECONOMY. THESE MODELS ALIGN WELL WITH THE DESIRE TO GAIN THE BENEFITS OF AN ASSET OR SERVICE, WITHOUT THE NEED FOR OWNERSHIP AND THE LOCK IN OF CAPITAL.
IN THE WIDER BUSINESS CONTEXT THESE MODELS ARE NOT NEW; BUSINESSES TYPICALLY RENT RATHER THAN OWN THEIR OFFICE SPACE, WE PAY FOR UTILITIES SUCH AS GAS & ELECTRICITY ON A CONSUMPTION MODEL ETC.
IT is now coming to this model and the explosive growth of cloud companies is a reflection of this.
A major challenge with any subscription business is to align the periodic revenue streams with the underlying costs and therefore reduce cash flow risk. Traditional perpetual licensing models with upfront payment for fixed usage volumes were not consistent with this model.
Over the past 10+ years a number of leading software vendors have recognised this issue and introduced specialist subscription programs aimed at the service provider community. These programs have provided the building blocks for service providers to deliver the SaaS, PaaS and Iaas offerings that are driving cloud growth.
Managing these service provider programs has been the core to the Rhipe business since our foundation in 2003 (See our Heritage) and we now manage 10 vendor programs across 7 countries
It’s a hybrid world
Despite the hype, not all IT services are in the Cloud. The reality is that we still live in a hybrid world with services deployed from on-premises, to the cloud and everything in between.
For small and medium businesses the subscription, cloud model has provided the opportunity to access enterprise quality IT services through OPEX based costs. Even the largest of organisations with significant capital tied up in large IT infrastructures are reviewing and in many cases actively adopting the cloud for IT services. However there are many reasons why more traditional, perpetual licensing models make sense.
So whilst our heritage is around subscription we have extended our portfolio to include more traditional perpetual licensing programs e.g. Microsoft LSP (Licensing Solutions Partner – aka Large Account Reseller LAR) and Microsoft Dynamics Master VAR (Value added Reseller). These programs allow Rhipe to provider a one stop aggregation point for hybrid cloud licensing.