As we recently announced, TenFour is shifting its business away from value-added reselling (VAR) to focus all of its resources, personnel, and operations on delivering IT infrastructure as a service (ITIaaS).
It’s an old adage that "you can’t be all things to all people," and for too long traditional IT providers have tried to do just that; building new systems on top of old, struggling to take full advantage of new technologies, jumping from one project to the next amid a shortage of IT talent, all in a bid to make dreams of digital transformation a reality. Unfortunately, this approach has left traditional IT providers and their customers in a precarious position: as the complexity and stakes of modern business have increased, solutions have failed to keep up.
The only way to adapt is to simplify, focus, and build new paths to business success.
For the last decade, businesses have employed technology to up-end almost every industry by shifting away from traditional product delivery models to subscription-based services. According to McKinsey & Company, "The subscription e-commerce market has grown by more than 100 percent a year over the past five years. The largest such retailers generated more than $2.6 billion in sales in 2016, up from a mere $57.0 million in 2011."
These services have redefined customers’ experiences, giving them what they want and on their own terms. "Rather than putting the focus of the business on the ‘product’ or the ‘transaction,’ subscription economy companies live and die by their ability to focus on and serve the customer over time," according to Tien Tzuo, CEO of Zuora, an enterprise software company focused on helping businesses deliver subscription-based services.
But this transition doesn’t occur without risk or cost. Just as TenFour is leaving its VAR business behind, each of the examples below made the choice to leave a traditional element of their industry behind to deliver a better product to their customers:
- Netflix – Though Netflix didn’t invent the subscription service model, it quickly demonstrated its Digital Age potential by introducing a streaming app and foregoing the distribution of physical media. This change enabled customers to access new programming from any device, subscribe or unsubscribe at will, and more easily share an account between family members. For Netflix this meant they could streamline their operation by eliminating mail expenses and focusing purely on content delivery.
- Adobe – For decades Adobe has been the name in creative software, and for decades designers, photographers, and videographers have purchased new iterations of its expensive suite of products year after year. That is, until Adobe made the transition to a subscription service model, enabling customers to more easily enjoy the most up-to-date version of the software, with all bug fixes, updates, and features automatically downloaded, as well as digital storage integrations.
- Whole Foods – With its focus squarely on not just the customer’s experience, but their health, Whole Foods set itself apart from its supermarket competition—especially in the last two decades—by embracing numerous environmental sustainability, animal welfare, and green standards and initiatives at every level of their operation. With these policies the company has eschewed many of the cost-cutting practices of the food industry to provide foods and products to which customers are enthusiastically loyal.
We believe the time is ripe for the IT industry to follow these examples. ITIaaS delivers many benefits similar to those pioneered by the services described above, but in a way that helps power digital transformation and build a foundation for successful business outcomes.
TenFour has seen numerous benefits to customers as it continues to focus on ITIaaS, including:
- Up-front subscription pricing structure leads to a reduced cost of ownership and a more consistent budgeting experience for the customer.
- Streamlined service offerings enable a high degree of scalability, letting customers quickly increase or decrease deployment of the ITIaaS offering based on the needs of operations and locations.
- Simplified and tested service component configurations ensure fewer defects, higher performance, and a more consistent customer experience.
- Fewer inconsistencies in network design, hardware, and maintenance ensure a more secure platform, providing a front-line defense to business-critical applications and data.
- By retaining ownership of every element of the ITIaaS solution the provider retains responsibility, holding themselves accountable and pushing little risk on the customer.
- Because it uses a subscription-based approach tailored to the customer ITIaaS providers have the opportunity to build long-term customer relationships, as opposed to one-and-done transactions.
These benefits are just the tip of the iceberg. Where can the ITIaaS approach to enterprise technology environments take business in the future?
We’re excited by this shift and to lead the charge toward more innovative enterprise IT solutions. Not only because of the prospective benefit to our business, but because of what it means for our customers and the IT industry at large. Maintaining an IT environment is different than innovating it, and it’s only through the latter that businesses are better able to accomplish their digital transformation goals and achieve success.
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