Is The Channel Experiencing a ‘Netflix Effect’?
Article submitted by Dirk De Wolf, Director Customer Solutions Services Europe at TD SYNNEX
Netflix experienced a sharp decline in numbers over summer, losing 200,000 subscribers in the first quarter of 2022. This could be in response to changing consumer needs and interests. Is the ‘Netflix Effect’ just a consumer trend or will corporate businesses be turning away from subscription services as well?
On the contrary, business subscription services have spiked even as we enter a period of economic uncertainty. As Technology-as-a-Service (TaaS) delivers the best possible value to the channel partner and their customers.
Subscription models empower businesses to harvest long-term and profitable relationships with customers, who will in turn benefit from improved budgetary management and access to the latest technology. The subscription economy offers flexible options for customers and allows businesses to continue to scale.
Rising demand
The demand for subscription models is more attractive than ever. According to IDC, all sub-categories of devices (including PCs, tablets, mobile phones, peripherals, and PC monitors) will have seen a total year-on-year growth of 12.4 percent. This provides ample opportunity for the channel to develop and modernise their business models and enhance customer experience.
Simplicity, cost, and convenience are crucial for channel partners and their customers. A TaaS solution ticks all these boxes, it is not just for large businesses, small and medium sized organisations with tight budgets can also benefit. The subscription model provides an all-inclusive and single manageable solution, which combines hardware, software, and IT services into a simple plan.
Key benefits
The advantages of TaaS are clear for all parties within the channel, from vendors and resellers to all types of end-users. The service offers great financial value, increases predictability for customers, and improves a business’ technology stack. It is particularly important for resellers to keep on top of upgrades, which benefits their customers by allowing them to access the latest technology as and when it is released. All while optimising their IT budgets and consolidating their bill.
End-customers are much more likely to commit to paying a subscription model than a one-off expensive purchase. Organisations no longer need to worry about stretched budgets, TaaS makes endpoint device enhancements more affordable with flexible funding and financing packages. There is also training and maintenance so IT spend is capped.
Resellers using TaaS
The subscription model enables resellers to grow their business and generate a secondary source of income. Some TaaS services provide a platform that they can integrate into their online shop and ERP system to provide the sales and marketing tools required. Such models deliver fully automated and streamlined backend processes; making it accessible for all types of resellers, from sole traders to SMEs to corporate resellers.
Building secure and long-term customer relationships is top priority for resellers. They can provide their customers with more accurate quotes, with no hidden extra charges, so there is full predictability of costings and the technology update cycle. TaaS takes away the hassle of upgrading each endpoint device every few years, the subscription service becomes an ongoing investment that does not deplete existing resources.
The future of TaaS
Recent research predicts global e-waste will total 67 million tonnes by 2030. The subscription model alleviates the problem of unused endpoint devices and e-waste by minimising over provisioning, whilst still allowing companies access to what is really needed. A device is safely removed at the end of its lifecycle, all stored data is wiped, and the item is dismantled in an environmentally friendly way — streamlining the device upgrading and recycling processes for customers.
There are countless opportunities for subscription services in the channel for resellers, vendors, and end-users. There is no indication of the channel experiencing a ‘Netflix Effect’. The subscription economy is forecasted to be worth USD 1.5 trillion by 2025 as resellers are combining hardware with software and services into their customer offering. With the current economic climate and tightening budgets on the horizon, subscription models will become essential for businesses. Customers can continue to improve their technology stack, whilst offering budgetary management, and the channel will enjoy long-term and financially valuable relationships with customers.
