The XaaS (“Your Product X”-as-aService) business model has disrupted many business sectors. Transitioning to the XaaS model allows businesses to shift from high capital expenditures (CapEx) to flexible operational expenses (OpEx) while generating a predictable recurring revenue, nurturing a dedicated customer base, and obtaining predictive operational insights.
Here’s how you can transition your business to an XaaS business model:
Align your organization.
Department leaders must identify organizational goals and outcomes. Only when alignment has been reached can your organization move forward to specify the strategy, including identifying the data, resources, and technology to utilize as well as third-party vendors or new hires that might be needed. Alignment can entail:
- A careful risk assessment.
- Price point calculation based on realistic analyses
- Reasonable contracts
- Customer and market evaluation
Moreover, since XaaS involves a shift in the core of your business, be prepared to make changes across your organizational planning, research, development, manufacturing, marketing, sales and service.
Choose you XaaS model.
Once the entire business is aligned, determine the type of XaaS model your business wants to offer. Deloitte’s “Flexible consumption business models” identifies the following examples:
- Unlimited subscription: Subscription plan with unlimited quantity, features, devices, etc. for a set period
- Predefined subscription: Subscription with access to a specified quantity of the product or features for a predefined period, generally with a minimum commitment
- Subscription plus overage: Subscription with access to a predefined amount for a specified period, with any overage billed based on actual usage
- Freemium: Access to basic services for free, while charging a premium for advanced or special features
- Consumption-based: Monetization on a pay-per-use basis, generally with no minimum purchase or commitment
- Outcome-based: Monetization based on value delivered to the customer, measured as quantifiable outcomes
Make the shift.
As today’s customers are moving to subscription-based services—be it to consume media or to get work done—companies must transform their business model from offering products to offering their product’s value as a service, which offers the following business benefits:
- Recurring Revenue Stream: New services and subscription-based models
- Dedicated and Engaged Customer Base: Intimate sticky relationships
- Predictive Instead of Reactive: Data analytics to provide customer insights and operational visibility
Services, not products, are the future of business. Customer-centricity lets you offer subscriptions that will address your customers’ problems and satisfy their need for convenience. Taascom can enable your company to embark on your business model transformation by helping you make the shift from a transaction-based to a subscription-based revenue model. If you want to kickstart your business model transformation, contact us today.