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7 Companies That Succesfully Use Cloud Based Subscription Models

Cloud-based subscription models, otherwise known as on-demand software or software as a service, have shown no signs of slowing down after several companies have bolstered their profits and subscribers have lauded the services as convenient and reasonably priced.

Two leaders in cloud-based subscriptions are Avid Pro Tools and Adobe Creative Cloud Suite. Both software companies were leaders in their respective genres when they moved to cloud-based services. Moving to the cloud offered companies, like Avid and Adobe, an opportunity to protect themselves from profit loss due to piracy, but there are other benefits. Internet delivery reduces or eliminates manufacturing and packaging costs. Software makers can also easily provide customers with the latest updates via the Internet. Benefits for the customer include availability of cloud storage for documents or creations. Subscription packages also offer consumers access to products for a relatively small fee.

1. Pro Tools

  • Flat fee pricing
  • Option to buy software outright
  • Thriving online community access with paid subscription

Recently, Avid announced that Pro Tools 12 will offer a pricing structure that will allow their customers to pay a monthly or annual subscription as an alternative to purchasing the software outright. The software maker focused on the advantages that come with cloud-based software. Customers receive updates and plug-ins faster, they can store their work on the cloud, and even share it with an entire community of creative professionals. The community offers producers the ability to scout out new talent by offering easy access to thousands of artists. Like many of these software developers, Pro Tools still offers a free limited edition version of their software. Source: MusicRadar.com.

2. Adobe Creative Cloud Suite

  • Buy subscription to one or all applications
  • Discount when subscribing to two or more applications
  • No option to buy software outright

Unlike Avid, Adobe has made a bolder move with its software lineup, which include InDesign, Photoshop and Illustrator. These products previously required the upfront purchase of software that could easily set the consumer back over $2,000. When the company announced it would move to a subscription-based service in 2013, it made clear that there would be no option to buy the software outright. For many new consumers and start-up businesses, the subscription model was a dream come true. However, many longtime Adobe users were angry about the switch. Still the company saw an increase of over $400,000 once the cloud operation was put into place. Adobe offers a tiered subscription that allows consumers to choose access to one or all of the company’s products. Individual software prices vary, depending on the software title. Source: Bloomberg.com.

3. Quickbooks

  • Multi-tiered pricing to accommodate businesses or any size
  • Option to buy software outright

For years, Intuit bragged that Quickbooks was the best and easiest way to share books with your accountant, but the process was not always seamless. That changed when the company moved Quickbooks to the cloud and created Quickbooks Online. Although subscribers can choose to download their books to their hard drive, the information is also stored in the cloud, where it is easily accessible to those with permission. Source: BizJournals.com.

4. Office 365

  • Flat fee pricing for entire bundle
  • No option to buy software outright
  • Bonus features included with subscription

Office 365 offers Microsoft’s most popular office products for around $10 a month. The applications include Word, Excel, PowerPoint and Outlook for Macs. Free cloud storage is also thrown in as a bonus, as well as an hour of free Skype calling. After its release, the company boasted a 5 percent increase in profits in the first quarter of 2013 over the same period in the previous year. Source: AppStorm.net and ComputerWorld.com.

5. Pandora

  • Flat fee pricing
  • New content added daily
  • Applications available for a variety of platforms

Pandora gained notoriety for being a free music service in its infancy. The free music application offered limited commercial interruptions. Then the company created Pandora For Business, a premium subscription for those who wanted non-stop music for a small monthly fee. The customized radio provider has become so popular that most car makers and aftermarket companies, like JVC, promote the service when marketing their products. In 2011, Pandora moved all of its components onto the cloud and, according to VP of Enterprise Information Services at Pandora Media Richard Rothschild, it helped the company go public. Source: CiteWorld.com.

6. Constant Contact

  • Multi-tiered pricing
  • Pay for only what you need

Unlike the previously mentioned companies, Constant Contact offers subscriptions based on usage rather than a flat monthly fee. The marketing software company also offers three different subscription bundles, which complicates the fee structure. Subscribers can save significantly by paying for the service a year in advance. This has been a big selling point for nonprofit organizations. The company has always used a subscription model, and has done so quite successfully. At the end of 2014, Constant Contact, Inc. boasted $88 million in profits with over 600,000 customers worldwide. Source: ConstantContact.com.

7. Basecamp

  • Pricing depends size and quantity of projects
  • Web-based application only

This cloud-based organizational service offers a simple way for group projects to be planned, managed and stored online. The pricing is based on how many projects and how much space your organization requires. Like many other subscriptions listed here, Basecamp offers a free trial with full access to its premium features. Unlike major software developers, Basecamp does not require a longterm contract and allows users to pay month by month. Basecamp is not funded by investors, so quarterly profits are not announced. The company does not release statistics related to its paid subscribers; however, it does boast over 15 million users. Source: 37signals.com.

Cloud-based subscriptions are certain to flourish as consumers move toward a mobile lifestyle. Accessing data and software on the go is crucial for most professionals. Advances in technology and an increase in competition may lower subscription costs for many cloud-based services; however, the future is promising for all who have dared to reach for the cloud.