Insights and Learnings from Acer’s Subscription Journey

Is there a cannibalization risk for existing one-time sales or product sales when you kick off a subscription model?

I think we need to compare two different things – we compare transactional sales, its sales and the objectives for everyone to maximize revenue and to maximise the number of units sold. When we do look at subscriptions, this is a starting point. And when we look at industry research that says that revenue is made with the customer are multiple times the revenue of a hardware product itself, there are so many services around it like insurance, reverse logistics, data wiping at the end of the subscription, that it actually opens a totally new door of new revenue streams… if you can monetize them.

Would you be able to articulate the value proposition for buying a (piece of) hardware versus a subscription?

If you’re looking to buy a product, the value proposition is you get specifications XYZ for the best price. I would say you get the best Acer product with those kind of specs for that price. If we look at the subscription, we’re looking at an enabling you as a customer to get your work done in the best   possible way, and that is tailor-made to your needs, and we don’t let you down. So it’s more a promise over the time of usage rather than the specifications of the product.

What would you say is the preferred way to set yourself up successfully for running a subscription business that also wants to lean towards more usage-based, which requires even more capabilities?

It depends on the resources that you can allocate right at the beginning. What do you want to prove first? Do you want to prove that there is a market for the solution that you want to bring to market? So, for this first MVP, I would, looking back, maybe go for as much manual as the organisation can digest in order to show the first wins before asking for an investment, showing the potential of the solution and then optimizing quite quickly. But I think, already, right from the beginning, having the framework and being aware that there is a big monster waiting for you that you better address right from the start.