Why own a C/ETRM system when you can subscribe?
The world is moving from products to services. Enabled by the Digital Age, buyers’ expectations have changed over the last several years where they have become subscribers moving from a product economy to a subscription economy. Consider a recent global study by The Harris Group shows that 57% of the people surveyed wish that they could own less stuff. The combination of high upfront costs, the hassles of ongoing maintenance, and the frustration of technological obsolescence has also made C/ETRM system buyers move towards innovative business models based on services. Consequently, cloud-based Software-as-a-Service C/ETRM solutions are overtaking traditional delivery software; Why ‘own’ a C/ETRM system when you can subscribe?
The term “subscription economy” refers to the business of offering subscriptions to customers. The idea of the subscription as a business model is of course not new. Just think of subscriptions for newspapers, magazines, public transport, gyms, internet, TV and your mobile. Due to technical developments, companies have been given new possibilities to offer their product or services to customers and adapt their business model accordingly. As a result, you see more and more products and services that are offered through a subscription.
We have been quite familiar with brands such as Netflix, Spotify, Zipcar, Salesforce.com etc, but recently we have seen new subscription offerings ranging from flowers, to razor blades, boxer shorts, carmakers offering rental services, to bicycles-as-a-service. Increasingly, we see businesses that sell to other businesses also adopting the subscription business model, even for complex machinery.
With “as-a-service” it is not the product that is central, but a total solution as a service to meet a specific need of customers. In the software market, Software-as-a-Service (SaaS) for the customer means no longer owning a perpetual license that’s paid upfront, and no on-premise equipment (software/hardware) that needs to be maintained and likely upgraded down the road. Instead software is delivered as a service, with only the need for an internet browser to access from anywhere, and sold on a subscription basis with subscription terms ranging from annual to multi-year.
While some may wonder why customers would migrate their owned licenses to subscriptions and thereby renting it back, those customers that do, recognize this as an opportunity to clean up and right-size. Think about it: if you’re not interested in owning the burden of maintenance and upkeep of products, preferring access to ownership is way more reasonable. According to a study by McKinsey, there is enough “case law” in the market to prove the value of subscription pricing. They found that customers will gladly keep paying for business value, but not for what might become “shelfware”.
Consequently, cloud-based Software-as-a-Service C/ETRM solutions are overtaking traditional delivery software. Total Cost of Ownership (hardware, software, maintenance, upgrades and innovation), moves to Total Cost of Service for the vendor, that is, energy and commodity trading companies benefit from cloud-based SaaS solutions since all the cost and risk of upkeep is the responsibility of the vendor, who therefore has an incentive to make the cost of operations as small as possible. As a result, Software-as-a-Service is fundamentally a better business model for the company and the vendor.
Consider these factors to minimize cost and complexity:
- ✓Software as a service: Anywhere, anytime access
- ✓Subscription advantage: Predictable capital and operation cost
- ✓No on-premise equipment (software/hardware): Reduced IT maintenanceand complexity
- ✓Fast deployment and implementation: Speed to market, speed to value
- ✓Painless upgrades: System is always up to date
- ✓Industry grade security: Your data is protected
Cloud-based Software-as-a-Service is focused on the future agility of your business: you can access the latest innovations and emerging technologies. Pioneer’s cloud-based SaaS C/ETRM is delivered via its award-winning www.trmtracker.com, which combines a standard set of ‘enterprise-grade’ tools across the Front, Mid and Back office, and is designed for rapid implementation by Pioneer staff, supported by on-line tutorial resources to accommodate self-configuration allowing for less reliance on Pioneer doing work and therefore lower implementation cost.
We’re entering an era of where consumers and businesses are questioning the very notion of ownership. Why should they invest in a product upfront when it’s cost-effective to access the service or output the product provides, and pay for it via a subscription that changes and evolves as needed? An entire generation of buyers is learning that they can have the convenience of almost any product or service, including C/ETRM solutions, without the traditional cost and complexity that comes with ownership.
Ready to jump on the (winning SaaS) bandwagon? Visit www.trmtracker.com and register for a video demo.

