We’re at one of those point where the economy is changing, and fundamentally. The cycles that determine how our economy functions are driven by so many different factors. We’ve been through faster, better manufacturing and the volumes of stuff it created. We’ve had the advertising age and how it created desire for that stuff. Now, deep into the digital economy, the subscription economy has come of age. And it too is changing.
At the launch of SAP Hybris’s new Revenue Cloud solution at SAP Hybris LIVE: Digital Summit 2017, Fergus O’Reilly, global vice president of solution management, explained how we’re at what he calls “an inflection point. Now we can make desire, we’ve got too much of it. Mass market messaging is no more. People want experiences.”
This makes it the perfect time to change the way you do business, using the new slew of data and information to open up new opportunities. O’Reilly cites the example of a GPS maker who, before everyone had maps on their phones, made handheld navigation devices.
Then they bought a mapping data provider and discovered that the data had potential – it could be used by (and therefore sold to) traffic planners and autonomous car pioneers. Now the GPS maker doesn’t make GPS devices – it deals in mapping and data. “The business model that got you here isn’t necessarily the business model that you’ll carry on with” said O’Reilly.
This ability to transform what you do is crucial to success in the new economy, and to making the most of the subscription economy. Even this most modern way of doing business is changing. O’Reilly described how one of the very first internet businesses was also one of the first to treat products as a service.
Blacksocks.com started out delivering black socks to businessmen after its founder got caught out in tatty, mismatching socks at a Japanese tea ceremony. It took away the need to think about socks. Now it attaches tags to the socks it delivers so you can match them up out of the washing machine. And there’s an app that will analyze the condition of your socks and order new ones if they’re wearing out. As O’Reilly said, “blacksocks.com has moved its business on by providing new value.”
Then there’s the wholesale transformation of Adobe, makers of professional-grade creative software, from seller of licensed product to an entirely subscription-based model. Adobe’s Phil Pass joined O Reilly at SAP Hybris Live and explained that it’s been a “phenomenal success. We’ve become a poster-child for the sharing economy.” Not that this massive change came about easily – or cheaply. “It doesn’t come from free,” said Pass. “It required huge investment and a real onus of managing the customer cycle. And the other part of the journey is to be risk averse.”
Given Adobe’s success at completely changing its business model (and therefore adapting to the new demands of the economy while giving its customers what they want), it seems like we’re not only at O’Reilly’s inflection point. We’re also at the point where the chances to transform your business are too good to miss.