For decades, companies have pursued the idea that the latest and greatest digital technology would offer them a competitive edge. And few would argue that this isn’t true. Hi-tech innovations opened the door to unprecedented efficiency and new ways to engage customers. But the transformative technologies that companies eagerly embraced weren’t set in stone. They continued to evolve—and to stay competitive, high-tech customers had to continue to invest in the latest and greatest.
This dynamic created some deeply entrenched challenges that high-tech customers are no longer willing to accept:
These and other factors are the drivers of a new approach for high-tech manufacturers: everything-as-a-service, or Xaas. By offering their platforms as subscription-based services, high-tech companies achieved the best of both worlds: they discovered a way to generate predictable, recurring revenue and meet the market demand for right-sized technology investments and greater flexibility and scalability.
But a new way of doing business means that high-tech companies will have to reinvent their approach to the market and embrace the following:
New world, new modes of business, new capabilities
In practical terms, an XaaS model will also introduce different processes for managing the client relationship.
In an XaaS world, billing is a whole new ballgame. It takes on new importance as a channel of client engagement. Companies will need to rapidly deploy highly innovative sales processes in an agile and scalable environment to deliver more flexible and personalized billing. This will demand the tight synchronization of sales and revenue management processes to ensure that customers get the right agreements and that those agreements are profitable and sustainable for providers.
A critical component of the XaaS model is managing the rights of usage, authorization, privilege, access, and permissions granted to a customer. These “rights of usage” —also known as entitlements—can be software-specific (such as licenses, downloads, updates, and free trial periods). But they can also apply to maintenance and support services, training, as well as warranties for physical hardware.
Subscription Order Management
High-tech companies will need to be as flexible as their customers when it comes to subscriptions. Providers will need the subscription order management capabilities to monetize a wide range of subscription, usage, and revenue sharing models.
Ready to explore how you can make the transition to the brave, new world of XaaS? Visit us here.
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