The Information Technology Subscription Model

The Information Technology Subscription Model

If you hadn’t noticed, nearly everything you purchase today is available in a subscription eCommerce model—from healthy meals and fancy wine clubs to cat foodMuch like early magazine subscriptions, the subscription model is generally a short-term agreement in which a customer agrees with a supplier on a price for interval deliveries of their products. In terms of subscription eCommerce, according to McKinsey & Company, “…15 percent of online shoppers have signed up for one or more subscriptions to receive products on a recurring basis, frequently through monthly boxes.”  

Software as a Service 

Several years ago, most of our software platforms shifted from physical out-of-the-box purchases to online subscription software that required nothing more than payment and quick download. End users found the process of downloading new software on the fly to perform a much-needed function was simple and easy. Company information technology (IT) leaders migrated from a self-managed software environment to a seamless software-as-a-service model offered by cloud providers to streamline and automate their software processes and upgrades 

Information Technology Subscriptions 

A number of “as-a-service” subscription models are now increasingly popular for purchasing not only products but also services including information technology (IT). This bundled approach is often a practical, lower-cost business decision for many small and medium business (SMB) owners. The fact is, cloud-based subscriptions for information technology, much like eCommerce subscriptions for consumers, are changing the way companies think and work. Businesses have come to rely on subscription models for almost every component of IT.   

Why Subscription IT  

It is no surprise that information technology (IT) managed service providers (MSPs) are finding the IT subscription model a perfect solution to IT infrastructure delivery while the companies that subscribe are saving money on software, hardware, staff, and other high-dollar operating costs. Once properly implemented, subscription IT services are designed for efficiency, speed, and performance without compromise. Below is a shortlist of subscription IT benefits to companies:  

  • Reduce overall costs  
  • Minimize challenges associated with on-premise solutions 
  • Add efficiency and security in a cloud-based model  
  • Receive setup and ongoing support 
  • Ensure third-party provider support for valuable data, backups, and recovery 
  • Receive administrative and user level training  
  • Rely on a scalable and sustainable long-term solution 

Many enterprise-level companies are also jumping on the as-a-service model as more and more providers infiltrate the online market. (Be sure to evaluate these companies before jumping into a short- or long-term contract, as not all providers offer the same level of service and support.)  

Subscription Equipment Leasing 

Just as IT services can be contracted through a cloud-based subscription, so can high-dollar equipmentIn third-party contract with a managed service provider (MSP), companies often have the option to lease equipment—using a similar subscription model. Consider the advantages. A small but evolving company won’t need to invest in expensive servers, ongoing maintenance programs, and IT staff to manage the company IT infrastructure. An efficient lease agreement offers scalable solutions for many SMBs that reduces or eliminates the need for onsite equipment and supportA subscription-based leasing model is a popular IT provider alternative.  

Preparing for an IT Subscription 

As a small or medium-sized company ready for a transition, a cloud subscription might include the use of a remote server (or network of remote servers) hosted online to manage your information, storage, processing, software, and other networking needs. One of the major benefits, when you work with the right provider using the IT subscription model, is that you pay only for what you need for as-a-service elements. Additionally, teams of workers have access to software or hardware remotely from nearly any location where the Internet is available.  

The terms are usually quite flexible depending on your needs. You may need a short- or long-term solution, and managed service providers have had a proven track record for subscription-based IT components for well over a decade. Many industries are showing success including government entities, medical offices, warehouses, retail outlets, manufacturing companies, and so many more.  

The first step in migrating to a subscription based IT infrastructure is to locate trustworthy provider for both ready-to-go solutions and custom solutions, so you get the level and type of IT services you need based on your business. The RackCo team has been providing third-party IT services for over 22 years, and experienced consultants are ready to help with your migration.