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> Companies never seem to want offer more expensive products with cheaper use costs. A recurring revenue stream, often via subscription, ideally with vendor lo
by ImPostingOnHN 3y ago
> Companies never seem to want offer more expensive products with cheaper use costs.
A recurring revenue stream, often via subscription, ideally with vendor lock-in, seems to be en vogue, judging purely anecdotally. You saw it in printers and razor blades, but "x as a service" is everywhere, seemingly increasingly so now. Rolls Royce does it for jet engines with their "power by the hour" program, for example (and has for decades).
From a seller business/investor standpoint, consistent net recurring revenue can often be better due to the predictability and planning it enables. Also it's easier to "hook" a consumer with a lower up-front price.
From a buyer standpoint, it's often easier to get approval for operational expenses than capital expenses, whether from higher management, or from investors. Also consumers often simply won't do the math to compare the two models, simply picking the cheaper one and then totally ignoring OpEx.