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Subscription model predicted to increase

Those looking ahead have already tipped increases in flexible consumption models as one of the main features of 2021

The channel is starting to turn its thoughts to what is coming in the year ahead and it is clear that for many, an expansion of subscription services is expected.

There has been plenty of talk over the course of 2020 about the shift towards everything as a service, with HPE committing to make its full portfolio available on that basis by 2022, along with moves by distributors to launch their own platforms.

Vendors are pushing it, the channel is supporting the model and it appears that customers are expected to want flexible subscriptions even more next year as they embrace the numerous options available.

Looking ahead, the feeling is that the demand from customers for subscription services will continue into the new year.

Dave Locke, chief technology adviser at WWT, gave his predictions for next year and highlighted the ongoing decoupling of hardware and software as a factor that would drive subscriptions.

“The decoupling of hardware and software is breaking down traditional upgrade cycles and allowing for businesses to make more flexible investments in commoditised hardware, choosing the right tools for their needs,” he said. “This trend of ‘whitebox hardware’ will drive demand for software subscription services throughout 2021.

“Software subscriptions satisfy both financial and technology leaders. Technologists can keep up to date with the latest tech without needing to upgrade hardware, and agreeing to a fixed price over time is financially advantageous as it safeguards businesses from fluctuations in purchase price costs.”

Locke was not alone in highlighting subscriptions as a trend, with Rob Elliss, EMEA vice-president for sales at Thales, also sharing that view.

“In 2021, we will see a dramatic rise in the channel offering subscription services to help businesses get through the tough Covid period,” he said. “Aiming to reduce capital expenditure in the light of reduced growth targets and profit margins, businesses will look for lower initial costs through subscriptions-based offerings, rather than the traditional up-front payment perpetual licences that have fuelled channel growth.”

The pandemic has had quite an impact on buying patterns and Christian Alvarez, senior vice-president of worldwide channels at Nutanix, said many customers were looking at how they consumed IT.

“We are in the midst of a significant, lasting transformation in how companies go to market and how customers procure and consume technology,” he said. “The disruption caused by the pandemic will accelerate the adoption of IT innovation at an unprecedented rate.

“This new normal will redefine how we do everything – from where we work to telemedicine, from education to e-trading and how data is securely accessed from anywhere at any time. In today’s subscription- and consumption-based economy, the new buyer’s journey will continue to evolve and change significantly.

“The proliferation of ‘everything-as-a-service’ models will require partners to reinvent themselves in this new reality and adopt new economic business terms, to offer flexible consumption and subscription options for the customers of today and tomorrow.”

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