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The Age of the Subscription Economy

Home The Age of the Subscription Economy

The Age of the Subscription Economy

by Sean O’Donoghue
Sean O’Donoghue

As enterprises move from physical products to digital services, they are redefining the business model relationship with the end customer, creating what we now know as the subscription model. Subscription models are one of the benefits of 5g for consumers – they can help deliver meaningful 5G consumer and enterprise services to consumers. Many of today’s most popular digital 5g services like video streaming, music streaming, transportation, newspapers, and magazines use a subscription model. The trend of 5g streaming will grow exponentially in the years ahead.

The rapid adoption of subscription-based services is not something new. Companies like Spotify introduced the idea of subscriber-based music streaming to consumers over a decade ago; today, Spotify boasts over 270+ million active users. In the enterprise domain, companies such as Oracle have also successfully made the transition from on-premise perpetual software to a cloud-based SaaS business model for infrastructure and software applications.

Meanwhile, in the communications industry, service providers are looking to enhance their digital offerings and business models to become the digital service providers (DSPs) of tomorrow. Streaming services are a big opportunity for consumers, and DSPs are embracing subscription-based models to procure, deliver, and monetize these digital services.

 

Subscription Models and the Mobile Network

This shift to subscription-based models is reflected in Affirmed Networks’ Mobile Network as a Service and Affirmed Cloud Edge offerings, which are designed to help DSPs rapidly deploy their mobile network infrastructure, accelerate service innovation and reduce costs in an open public cloud infrastructure.

Mobile Network as a Service Capabilities

With Mobile Network as a Service, DSPs can:

  • Rapidly and cost-effectively test new markets and services by leveraging public cloud infrastructure and economies of scale;
  • Instantly instantiate new services and functions such as deep packet inspection, media optimization, and network address translation on a single platform;
  • Focus on growing the digital services business opportunity while a partner delivers the underlying platform;
  • Eliminate upfront CapEx costs required for hardware and data center costs while controlling OpEx costs thereafter;
  • Provide “just in time” network scaling for the capacity that DSPs actually need, rather than “just in case” capacity planning that often requires expensive over-provisioning of network resources;
  • Implement local breakout services to reduce backhauling costs and improve customer experiences.

 

Procuring, delivering, and monetizing mobile network infrastructure has evolved from hardware-based solutions to perpetual software-based models and, now, to SaaS-based models. DSPs are slowly changing procurement procedures and other internal practices as they move to SaaS-based solutions delivered by innovative partners. DSPs understand the value creation that SaaS enables in their business by rapidly delivering a tailored solution for customers, generating recurring revenues, and reducing customer churn. For the end customer, this all boils down to convenience.

 

A Win-Win for Consumers & DSPs

A digital service that is personalized to the needs of the individual customer in terms of commitment, payments, and accessibility is paramount. The evolution of traditional models to SaaS-based models is necessary to meet changing customer behaviors and foster innovative ways to generate new revenue streams. The technology and the commercial models are now available to DSPs to help them rapidly prototype, innovate and deliver meaningful 5G consumer and enterprise services. At the same time, end consumers get more personalized service. It’s a win-win scenario that everyone can subscribe to.