Subscription Based Services: Saving Companies Time and Money

Hardware and software as-a- service has become a growing trend in Information Technology. Rather than purchasing and owning the solution set that runs your business many companies are choosing to transition their systems to hosted platforms. This new subscription based, pay-as-you-go model provides ease of management and predictable, scalable costs.

Your email and line of business applications no longer need to reside on-premises, resulting in costly upkeep and a lack of redundancy. In an effort to continually provide system uptime many Information Technology professionals turn to high availability solutions, wherein an identical piece of hardware takes over in the event the primary device were to fail. Maintaining and budgeting for upgrades to these systems can be timely and costly. Hosted solutions, however, typically have redundancy built into their subscription offerings, provide automatic upgrades and often guarantee 99.9% availability.

The decision to transition to an as-as-service solution requires an analysis of your current hardware and software, as well as the personnel you employ to maintain these systems. Hardware and software upgrades often come as a surprise when not properly accounted for. As an example, a prospective customer recently recanted a scenario to me where all of their server hardware and operating systems were replaced, seemingly unexpectedly. The cause, as is often the case, stemmed from their current operating systems going end-of-life and no longer supportable by the manufacturer. The result, unfortunately, was having to purchase upgraded software, as well as upgraded servers given limitations of the hardware already in place to run the new operating systems. To avoid such a scenario many hardware and software vendors have transitioned or begun new programs to host and alleviate the need for companies to concern themselves with the maintenance and uptime of their services. This shift has resulted in the avoidance of costly initial investments. Subscription models provide the flexibility to purchase hardware and software only for the time and amount of users needed.

From a resellers perspective this is both a positive and a negative. Subscription based models generally strip resellers of any potential markup but also remove the need to commit resources to timely maintenance, since that is handled on the backend by the provider. As hardware and software margins continue to shrink, the ease of support continues to rise, resulting in cost savings elsewhere.

Businesses need to work with their IT consultant to ensure they can plan for a smooth transition to these subscription models. Weighing the costs and benefits of these models and whether you want total control of the upgrades will depend on the nature of your business. Many of our customers elect a hybrid approach wherein they elect to maintain on-premises hardware but move certain applications to the cloud for varying reasons. A meeting with your consultant and review of what systems are already in use is a good place to start.