This week I encountered a web based service and took note of their ‘cancel anytime’ feature. It occurred to me that this had for a few years become a novelty feature in software. Now I tend to expect it. So much that I almost overlooked this product’s claim of stopping anytime.
Subscriptions became the default business model for many of the popular software services of the last 10 years. There has been a marked shift though, to a different model, subtlety, but different none the less. That is the on-demand model which allows you to cancel and restart the service at any time.
Take for example services such as Netflix where you can stop, restart, scale up or down on demand. This model works because it mirrors the reality of so many services we use every day: dry cleaners, house cleaning, etc.
This got me thinking: What subscription services do not have an on-demand option? I asked this question to my circle of friends on Facebook and received back several familiar brands. Comcast. Dish Network. DirectTV. Verizon. Cable television and cellular.
To some extent, this is not surprising. We have all watched the big providers try to acquire companies up and down the stack of content and service. We’ve seen them throw everything at crushing net neutrality laws to be able to increase their lock-in power. Cable and wireless seem to be the holdouts in the consumer space, although there is no shortage of competitors trying to disrupt their rule.
So, I got to thinking a bit more about the B2B software services we use. Platform-oriented software, from cloud providers, such as Amazon Web Services (AWS), is already on-demand.
There are many vendors that are not, though. These are products that fall under the classification of ‘enterprise software applications’. Most of these are still based on annual contracts. As a product person, I understand why this is good for the product companies. I struggle to see scenarios where its logical to constrain the customer with lock-in given this evolving standard. The early days of SAAS saw the ‘perpetual license’ start to give way to the ‘annual subscription’. I dare say that the these plans can’t exist much longer.
What enterprise software applications have you seen transition to a pure on-demand model? That is one with consumption or monthly service fees, but no prohibitive set-up/activation fees, cancellation fees, etc. Please share in the comments.