The problem with the subscription model is that it doesn’t incentivize making improvements. If I buy a piece of software, I’m not going to buy the new version unless they make significant improvements. With a subscription model I have to continue paying for it even if they make no improvements to the software.
The customers just keep asking for new things. Does a meal planning app need to be a subscription service? Probably not. But anything that keeps on adding new features costs a lot of money. Software engineers aren’t cheap.
This is a problem of poor sales and marketing. The sales people should simply charge the customer for the changes that are asked for. Of course neither the sales people nor the customer understand the cost (they think it’s just pushing one button). Sales people tend to have too much influence in a company (like they bring in the money, not the product, and developers are a cost) and they’ll say yes to anything the customer asks for even if the customer may not even care all that much. But hey if this company is offering free software development services, why not take advantage of it?
A service model might make sense in some cases, but oftentimes it does not. Most definitely not in the consumer market, but we see that everywhere now.
Back in the 80’s and 90’s, they were making actual improvements to things like spreadsheets and word processors. Remember when spell check was a separate program you ran after the fact?
I’d say MS Office hit the point of perfectly usable, needs no improvement somewhere around 2003. Even by then, the vast majority of users weren’t aware of or cared about the features they were adding and would soon start strongly wishing Microsoft would quit fucking around with the UI every few years.
Their business model relied on people buying new versions every so often, and then they made a version that was everything anyone would need…so now what? Demand that they just keep paying for it.
Just thinking out loud, I’m wondering if there’s not a mix of two innovations - the big innovation such as whole new software or hardware to do something that wasn’t possible to do before or at least not in that way and small innovation, i.e. incremental improvements.
In Tech, companies usually start with one big innovation (consumer OS for Microsoft, web search with automated crawling for Google, universal discussion forum for Facebook and so on) and after that mostly do smaller innovations on it. Whilst they often have a couple more big innovations in them (for example Android OS for Google and Office for Microsoft) they seem to eventually run out of such innovations or maybe just become too much “play it safe” when it comes to them so don’t really do the break-through big innovations anymore.
I believe corporatisation destroys the environment in a company for big innovation (certainly it matches my own experience in working in all sizes of company) - it’s a lot easier, ntaural and safer for a big company with a large infrastructure, big costs and an internal preponderance of well-entrenched managers who have their own internal fiefs and spend their time on internal company politics, to keep on milking the existing cow than to try and come up with something completely different and the very mindset of the company changes from “try crazy ideas” of the small, poor and desperate startup to the relying on steady and safe income streams that more appeals to the bean counters that take over those companies when they get big enough.
Under a sales model, you need a steady stream of small innovation on the core product to keep the steady and safe income stream going - people need to be convinced to buy the latest and greatest version of the product so it general need to offer something more than the last one, and although marketting can be used to convince people to buy a new version which has little more than the last one (look at iPhones of late), as the product matures there is less and less small innovation on it that’s actually usefull so there is less and appeal for consumers to get the latest version and that income stream falls over time.
Both subscription models and paid-by-advertising upend that need for even small innovation - a company doesn’t need to regularly make a new and improved version of their original big innovation, they just need to keep on getting the steady stream of revenue from their existing product. I would say that this appeals even more to bean counters that the small innovation cycle since it’s even more predictable, hence you see big companies shifting to it even in things were it makes no sense for the product itself.
The problem with the subscription model is that it doesn’t incentivize making improvements. If I buy a piece of software, I’m not going to buy the new version unless they make significant improvements. With a subscription model I have to continue paying for it even if they make no improvements to the software.
This is a problem of poor sales and marketing. The sales people should simply charge the customer for the changes that are asked for. Of course neither the sales people nor the customer understand the cost (they think it’s just pushing one button). Sales people tend to have too much influence in a company (like they bring in the money, not the product, and developers are a cost) and they’ll say yes to anything the customer asks for even if the customer may not even care all that much. But hey if this company is offering free software development services, why not take advantage of it?
A service model might make sense in some cases, but oftentimes it does not. Most definitely not in the consumer market, but we see that everywhere now.
Especially with software, it’s a weird world.
Back in the 80’s and 90’s, they were making actual improvements to things like spreadsheets and word processors. Remember when spell check was a separate program you ran after the fact?
I’d say MS Office hit the point of perfectly usable, needs no improvement somewhere around 2003. Even by then, the vast majority of users weren’t aware of or cared about the features they were adding and would soon start strongly wishing Microsoft would quit fucking around with the UI every few years.
Their business model relied on people buying new versions every so often, and then they made a version that was everything anyone would need…so now what? Demand that they just keep paying for it.
Just thinking out loud, I’m wondering if there’s not a mix of two innovations - the big innovation such as whole new software or hardware to do something that wasn’t possible to do before or at least not in that way and small innovation, i.e. incremental improvements.
In Tech, companies usually start with one big innovation (consumer OS for Microsoft, web search with automated crawling for Google, universal discussion forum for Facebook and so on) and after that mostly do smaller innovations on it. Whilst they often have a couple more big innovations in them (for example Android OS for Google and Office for Microsoft) they seem to eventually run out of such innovations or maybe just become too much “play it safe” when it comes to them so don’t really do the break-through big innovations anymore.
I believe corporatisation destroys the environment in a company for big innovation (certainly it matches my own experience in working in all sizes of company) - it’s a lot easier, ntaural and safer for a big company with a large infrastructure, big costs and an internal preponderance of well-entrenched managers who have their own internal fiefs and spend their time on internal company politics, to keep on milking the existing cow than to try and come up with something completely different and the very mindset of the company changes from “try crazy ideas” of the small, poor and desperate startup to the relying on steady and safe income streams that more appeals to the bean counters that take over those companies when they get big enough.
Under a sales model, you need a steady stream of small innovation on the core product to keep the steady and safe income stream going - people need to be convinced to buy the latest and greatest version of the product so it general need to offer something more than the last one, and although marketting can be used to convince people to buy a new version which has little more than the last one (look at iPhones of late), as the product matures there is less and less small innovation on it that’s actually usefull so there is less and appeal for consumers to get the latest version and that income stream falls over time.
Both subscription models and paid-by-advertising upend that need for even small innovation - a company doesn’t need to regularly make a new and improved version of their original big innovation, they just need to keep on getting the steady stream of revenue from their existing product. I would say that this appeals even more to bean counters that the small innovation cycle since it’s even more predictable, hence you see big companies shifting to it even in things were it makes no sense for the product itself.