What is the consumption model and how does it benefit your business?
Posted: Wed Jan 22, 2025 6:15 am
The cloud revolution has imposed a new way of hiring companies. Learn what the consumption model is and what its advantages are for your business.
In recent times, there has been a paradigm shift in the way companies hire. This revolution came from the cloud , which imposed the ability to establish prices according to business consumption and not a fixed price as was customary in the software industry.
Let's analyze this trend to understand how this model impacts businesses by boosting commercial results.
There are many services that are paid for according to the stockholder database or intensity of their use, such as electricity or gas. Why not with technology? This is what has been happening for some time now; the most disruptive companies have been encouraged to transform their services by creating alternatives based on the type of use required by their clients. This is how the so-called “consumption model” emerged. Now, is it possible to transfer this to business applications and systems?
Consumption model vs. subscription payment
The subscription model involves a permanent payment for a set amount or a specific license, which does not guarantee a return on investment for businesses. That is why something superior was needed, something that understood the specific needs of making software investments tangible and extracting more value.
BLOG - What is the consumption model and how it benefits your business-1
When we buy a subscription, whatever it may be, we often experience the “abandonment” experience of the provider. Something like: payment made, end of communication. They never contact us again. That is why this new contracting model also emerges as a way to involve sales teams with a contribution of value throughout the entire experience of each of their clients.
In this model, it is the vendors who accompany, guide and encourage the best use of the service, so that the contracting companies make the best use of the possibilities of the technological ecosystem they are contracting.
Knowing more about your customers and working closely with them definitely means getting closer to commercial success, which is why something immediately becomes evident here: greater involvement between Sales and customers encourages feedback of positive results.
In recent times, there has been a paradigm shift in the way companies hire. This revolution came from the cloud , which imposed the ability to establish prices according to business consumption and not a fixed price as was customary in the software industry.
Let's analyze this trend to understand how this model impacts businesses by boosting commercial results.
There are many services that are paid for according to the stockholder database or intensity of their use, such as electricity or gas. Why not with technology? This is what has been happening for some time now; the most disruptive companies have been encouraged to transform their services by creating alternatives based on the type of use required by their clients. This is how the so-called “consumption model” emerged. Now, is it possible to transfer this to business applications and systems?
Consumption model vs. subscription payment
The subscription model involves a permanent payment for a set amount or a specific license, which does not guarantee a return on investment for businesses. That is why something superior was needed, something that understood the specific needs of making software investments tangible and extracting more value.
BLOG - What is the consumption model and how it benefits your business-1
When we buy a subscription, whatever it may be, we often experience the “abandonment” experience of the provider. Something like: payment made, end of communication. They never contact us again. That is why this new contracting model also emerges as a way to involve sales teams with a contribution of value throughout the entire experience of each of their clients.
In this model, it is the vendors who accompany, guide and encourage the best use of the service, so that the contracting companies make the best use of the possibilities of the technological ecosystem they are contracting.
Knowing more about your customers and working closely with them definitely means getting closer to commercial success, which is why something immediately becomes evident here: greater involvement between Sales and customers encourages feedback of positive results.