“As a Service” changes everything

by Lilia Shirman on June 20, 2011

in As A Service,Strategy and Planning

The “As a Service” business model is spreading like wildfire – in the tech sector and beyond.   This is the first of a series of observations about this old, but new again approach to business, and what it implies for both the providers and consumers of services.
For the first in this series, my own attempt at a basic definition:
“As a service” (AAS) refers to businesses that sell their goods on a subscription basis.  The more traditional alternative  is to sell once, and upon that sale, transition ownership from the seller to the buyer.  The change in ownership is perhaps the core differentiator between “traditional” and service-based businesses.   In the AAS model, the change in ownership either:
  1. Happens slowly over time, as in the case of businesses whose services is to deliver information or products over time – think “Cheese of the Month club” or magazine subscription.
  2. Never takes place at all.  In this pure service model, the seller retains ownership, and in essence sells access to use the goods.   This is of course the model being implemented by Software as a Service (SaaS), Platform as a Service (PaaS), and  Infrastructure as a Service (IaaS) vendors that make up the hot “cloud provider” market.
That’s my attempt at defining  AAS in the broadest possible terms.  All comments and better definitions welcome and encouraged!
Next time –  Why switch?
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