I was excited when trying out the first food recipe from our new subscription service. These are going mainstream and offer more than just a tasty recipe. Delivered as a one-off package – including the recipe and all the ingredients – the service creates both the motivation and provides the right ingredients to tackle something a little more ambitious as we put together the family’s evening meal.
It’s not just food where this sort of business model is popping up. Products that were once routinely bought outright – like cars – are now being sold and consumed based on new, imaginative metrics for usage, service, and experience. Car usage first moved from outright ownership, often with finance, to a subscription model – multi-year leasing – and now this has shifted again to a consumption model, where people no longer own or lease any vehicle, but instead opt for the convenience of taking a taxi, an Uber or a DriveNow car when they need mobility.
Subscription-based purchasing is a trend that’s taking over. Analyst firm Forrester recently produced a paper explaining why this model is so attractive to both business users and consumers, as well as outlining how vendors are transforming their business models to meet the burgeoning demand.
The cloud showed us the way
Cloud apps and infrastructure set the pace here. Who hasn’t bought a cloud service of some kind, whether it’s to stream music instead of buying CDs, or backed up their PC via a cloud service instead of using an external hard drive?
Cloud adoption took off because of a double whammy of factors. The first is the speed and ease at which a new service can be set up. All you need is a credit card and an internet connection, and you can be up and running in minutes – quite different from the extremes of the build-your-own-solution approach in the on-premises data center of old. The second factor is flexibility: during the Covid pandemic, business cloud users have been able to scale down the use of their services as quickly as they previously scaled up to meet soaring demand.
Though it’s not just the combination of speed and flexibility, sometimes technology investments simply don’t work out. In these circumstances, it’s much simpler to scale down costs with a pay-per-use service, but quite different if you have just signed a three-year lease.
Building a data-driven enterprise – A foundation to digital transformation
How are we applying these lessons in pay-per-use to today’s paramount enterprise challenge – data?
If you’ve become almost deaf to the term “Digital Transformation”, it is because it is used so much, you might have missed the recent shift in its meaning. The focus has now moved beyond technologies that help businesses become more efficient, manage cash flow more effectively, and streamline IT estates. Today, data rules. The emphasis has shifted to unlocking the value of corporate data. Ultimately, the success of any company’s digital transformation journey relies on leveraging the vast amounts of unstructured data it is accumulating, through turning it into meaningful insights that create competitive advantage.
And there is the absolute requirement for security too. Enterprise data is distributed across many locations, from edge to core to multiple clouds, consequently maintaining control, protecting, and securing data whilst maximizing business value is challenging for businesses to tackle alone.
In the context of these enterprise-scale challenges and needs, pay-per-use is an enticing offer. Reducing risk by aligning your costs for whatever happens next provides a solid platform for successful business transformation. It creates the flexibility for either business growth or retrenchment; frees up cash to invest in something even more productive; minimizes assets on the balance sheet for higher returns-on-assets ratios; and, of course, it gives the ability to focus suppliers on positive, outcome-based behaviors.
For example, Fujitsu, which has been strong in this market for some time, has now massively broadened its uSCALE on-premises pay-per-use offer. Our customer Harbor Solutions, for example, recently sourced the solution it needed for backup, disaster recovery, and object storage, with a uSCALE consumption model that shifts costs from capex to opex, takes the solution off-books, and delivers expandable data center capacity to meet variations in data demands.
Post-Covid transformation – without draining cash
Pay-per-use certainly meets the extraordinary needs of our times. The pandemic has intensified the need to digitally transform, but at a time when cash is even more precious than usual. uSCALE supports business transformation and the pace and agility that businesses responding to the crisis need, with zero-capex, scalable, on-premises IT resources that are measurable, cost transparent, and aligned to business needs.
It’s a best-of-both-worlds paradigm, that gives all customers – not just service providers – access to the latest high-end infrastructure technology with no upfront payment. It’s very customer-centric too, as the business decides what it is that’s being consumed and hence paid for. It also has the flexibility to scale up and down, depending on whether things go well or if there is further disruption.
Can we do it?
Managing and getting the most out of pay-per-use is a skill. When it comes to on-premises data centers, not all organizations have or want the in-house resources for the selection, sourcing, installation, and orchestration of advanced technology, while still staying compliant with new regulations.
Fujitsu uSCALE overcomes this tension by providing the pay-per-use people and skills needed to optimize on-premises data center performance. In one case, our consultancy-led approach gave a customer the confidence to roll out a Robotic Process Automation (RPA) initiative with a pay-per-robot solution, resulting in better commercial flexibility and knowledge, and paving the way for automation success. The ethos is not arrogant or imposed. Fujitsu’s culture emphasizes co-creation, where the sum is greater than the parts and the combined insights and technical knowledge of Fujitsu, its customer and partners is what delivers the additional value.
This approach also opens the customer up to a diversity of possible technology partners – with Fujitsu managing any complexity. uSCALE is service and product agnostic. It can be configured to work with contributions from multiple suppliers leveraging Fujitsu’s extensive ecosystem of technology, channel, and service provider partners. Data center products and services from Fujitsu and its technology partners can be combined flexibly.
Pay-per-use is today’s purchasing method and especially right for the times as business and society reassess priorities post-Covid. You can further explore the Fujitsu uSCALE offerings on our new dedicated website.