The subscription economy has seen tremendous growth in recent years and is expected to continue growing exponentially in the coming years. For telecom resellers, it’s crucial to understand the reality behind subscription models and look beyond the myths. Mitel shares its insights on five common misconceptions.
What is a subscription model?
A subscription model is a commercial approach where customers pay a recurring fee to access products or services. From Netflix and Spotify to business applications like Adobe Creative Cloud – subscriptions are everywhere. Although it may seem trendy now, subscription models have been around for centuries.
Myth 1: it’s only for B2C
Reality: Subscription models are growing rapidly in the B2B sector. According to research by Recurly, 70% of business leaders say subscription models will be crucial to their future outlook. Stripe reported that the growth of recurring payments outpaces one-time payments by 16%.
For telecom resellers, this means IT departments are increasingly shifting their budgets toward subscription models and cloud-based solutions. This presents enormous opportunities for partners who understand the trend.
Myth 2: it’s all about the cloud
Reality: While cloud and subscriptions often go hand in hand, they are not the same. Many companies mistakenly use the terms interchangeably. It’s important to distinguish between the deployment model (cloud vs. on-premise) and the commercial model (perpetual license vs. subscription).
Mitel’s view is that subscription models can also be valuable outside the cloud, depending on the specific needs of the customer.
Myth 3: it’s only about finances
Reality: While financial benefits are important – such as predictable revenue and improved cash flow – a subscription model is ultimately about the customer. Satisfied customers stick around, which naturally leads to strong financial performance.
Subscription models allow organizations to:
• Better tailor solutions to specific customer segments
• Build closer relationships with customers
• Gain insights into customer needs for future sales opportunities
Think of Customer Success – a discipline that emerged around subscription models, focused on delivering long-term customer value.
Myth 4: it’s only for startups
Reality: Large, established companies like Adobe, Microsoft, and Mitel have successfully transitioned to subscription models. Mitel, certainly not a startup, now offers subscription options across its entire portfolio.
This transition provides benefits for both partners and end-users. Established organizations with traditional licensing models are making a widespread shift to more flexible subscription options.
Myth 5: it’s a subscription-only world
Reality: While subscription models are important, they’re not suitable for every situation or every customer. Some organizations and consumers want or need other transaction methods.
Mitel’s approach is based on choice and flexibility. By offering a variety of commercial models, we can meet the broadest range of partner and customer needs.
The Opportunity for Telecom Resellers
For BusinessCom partners in the Benelux, Nordics, and Baltics, this trend presents significant potential. Subscription models create predictable revenue, stronger customer relationships, and new growth opportunities.
Mitel’s vision is clear: the future does not lie exclusively in subscription models, but in offering the right mix of options that match diverse customer needs. This enables our partners to deliver the best solution for every customer, regardless of their commercial model preference.