Skip to main content

Software Subscription Models have Upset the Status Quo

While software-as-a-service solutions change the way that business technology is being used within the enterprise, legacy IT vendors are scrambling to evolve and rationalize their product portfolios -- relative to the emergence of nimble new players that apply very different business models.

According to the latest worldwide market study by Technology Business Research (TBR), software providers that also have hardware portfolios are implementing flexible delivery models, and now they're marketing the implied value of their unified and optimized product portfolios.

"We are seeing vendors embrace their inherent strengths, as large multi-line vendors integrate products to control more of the stack, while smaller pure plays leverage a deeper niche focus," said Meaghan McGrath, analyst at TBR.

Remaining Market Development Challenges

These actions indicate that some go-to-market issues still remain, as traditional software vendors look to maximize the monetization of their existing portfolios amid business user consumption transitions.

The shift of applications software to a subscription model has been a more rapid migration than in the infrastructure management (IM) space, which TBR attributes to the less complex transition of applications to the cloud rather than databases and middleware technology.

While bring-your-own-license movements have marginally slowed the forfeiture of software contracts, overall revenue continues to decline. To balance the lower up-front revenue of subscriptions, many software applications vendors have looked to new customer segments.

Some smaller vendors have responded by moving up-market into large enterprise accounts, but more prevalent is the opportunity for larger vendors -- with solutions that were previously too expensive and complex -- to now pursue SMB accounts.

Digital Business Transformation Upside

Vendors face similar challenges within the IM market segment, as evolution is being driven by changing application delivery methods -- as well as increasingly complex hybrid cloud computing environments.

TBR believes that vendor performance in the infrastructure management space continues to be challenged by delivery model shifts that favor subscriptions and ongoing financial headwinds outside core markets.

However, TBR research identified opportunities for vendors, particularly in the professional services space, to capitalize on demand for business transformation services as more customers adapt their legacy infrastructure to enable agile application development and DevOps methodologies.

Persistent declines of license and maintenance revenues across benchmarked vendors indicate market opportunities in the IM space are shifting to higher-value engagements, according to the TBR assessment.

Popular posts from this blog

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente

Global Pandemic Accelerates the Evolution of Transportation

Given the current trends across the globe, organizations that depend upon the continued growth of personal vehicle ownership will need to consider a plan-B scenario. While some companies will be able to adapt, others may find that their traditional business model has been totally disrupted. According to the latest worldwide market study by Juniper Research, Mobility-as-a-Service (MaaS) will displace over 2.2 billion private car journeys by 2025 -- that's rising from 471 million in 2021. Juniper believes that for MaaS to enjoy widespread adoption, subscription or on-the-go packages need to offer a strong combination of transport modes along with feasible infrastructure changes, high potential for data collection and low barriers to MaaS deployments. Mobility-as-a-Service Market Development The concept of MaaS involves the provision of multi-modal end-to-end travel services through a single platform by which users can determine the best route and price according to real-time traffic