June 2016 | Blog
The Future of Services – and the Top Two Disruptors Changing The Industry
A few days ago I had the pleasure to moderate a round table discussion at the Docville 2016 event. The topic was "the disruptive service landscape", and I'm happy to share some of the conclusions of the discussion.
The future of services is a very broad topic. We really covered two major areas: the impact of SaaS models on ISV's service business and the future of hardware services.
Service revenues in SaaS and App business models
Many of the traditional ISVs in our industry are trying to move their business model "to the cloud", by offering different license models and hosted applications. The fact that most of these ISVs rely heavily on service revenues makes this change very difficult. Not only do they have to overcome the technical challenges and the cultural impact of a change in the business model, there is a change in customer expectations that might have another very direct impact on their P&L.
With "on premise" software, customers were used to buying relatively complex, state-of-the-art applications and customizing them to their specific needs. This customization brought nice service revenues to ISVs and their partners. However, in the new world, with customers increasingly buying various "apps" for specific products solving a specific problem, their willingness to pay a lot of money for customization is going away.
However, we concluded there will be new service opportunities in the market, which most likely will be achieved by new entrants. In the future, there will be a lot of these SaaS services and apps used by companies, but this will also create a new need for integrating these apps and services. And this might present the big future business opportunity for services.
The future of hardware services
The second conclusion was around the future of services for hardware. It became very clear that in times of "everything as a service", the meaning of services is changing. Going forward, we will shift from talking about ‘services for hardware’, to ‘hardware as a service’.
This means that document scanners as capture hardware will have to go through a similar development as MFPs have done before, including new technologies for machine to machine (m2m) communication, remote monitoring and predictive analysis - and therefore creating the basis for new business models. It remains to be seen whether this will be simple "click charge" models, as a lot of people talk about, or more disruptive topics like shared scanning infrastructure.
Whatever it will be, the conclusion of the discussion was very clear. One of the participants stated that “service was a good business model for us; now it’s gone”. Services as we know them will still be around, but their importance will decrease and new service offerings will appear. It will be the challenge for all major players in the market to make sure they are prepared for these changes.
Learn more:
If you want to discuss how to transition the maintenance and service of your scanning infrastructure into new models, feel free to contact us anytime .
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| About the Author: Andy Schneider is Senior Vice President at DTS Service. |
