It seems like as a society, we’ve fully embraced subscriptions as a business model. Back in the day, you maybe subscribed to a local newspaper, and got conned into a Columbia House $0.01 CD service. But in 2018, there are no end of subscriptions. You can get a subscription for socks. You can get one for ugly fruits and vegetables. There’s even a subscription that will mail you copies of historical letters.
Technology has not been exempt from this tide. Indeed the ubiquity and reliability of the internet has been a force to perpetuate it. Software companies have been moving to subscription models for a while. Adobe and Microsoft (to name just a few) have fully embraced cloud-based subscription models for software. This has proven to be controversial among customers. Some simply want to pay once for a piece of software and own it. The subscription does have its benefits, including continued support and upgrades for new features.
Throwing hardware into the subscription mix complicates matters. The same advantages apply, but the drawbacks are also stark. What happens if you decide to not renew a subscription? Are you left with a piece of bricked hardware?
These are the waters into which Cradlepoint has recently waded. They have announced new subscription models based around their NetCloud Solution Packages. After May, these all-inclusive packages will be the only way to buy into their edge routing ecosystem.
These subscription packages come around three distinct SKUs, designed for their most common deployments: branch, mobile and Internet of Things. Each of these subscriptions include full access to the NetCloud management suite, optimized hardware for the deployment with warranty, and 24/7 support. These subscriptions come with 1, 3 and 5 year terms, with hardware for each SKU included in the base subscription.
The subscription comes in two flavors, Essentials and Advanced. According to Cradlepoint, the Essentials tier will meet the needs of 80% of customers, with the advanced tier unlocking features like PGP routing. But the hardware, cloud management, and support are standard between the two. This should make licensing a little less of a headache for most organizations. Instead of having to guess the business value of certain features while looking at a morass of licensing, Cradlepoint offers a simple choice.
The benefit for making the move to a subscription model for Cradlepoint is that they can count on all of their customers having access to their NetCloud suite. This allows for centralized management and provisioning of routers and APs across a wide variety of edge sites. In fact, Cradlepoint allows for some interesting configuration right from distribution, allowing you to setup sites prior to having equipment being shipped out. This allows edge sites without a lot of IT (whether at retail or mobile locations), to just plug in their router and have all configuration already done. On top of this Cradlepoint’s channel partners are now integrating SIMs directly into routers, providing an even greater ability to stage deployment for their customers. Combined with their SD-WAN offerings, this allows for a edge site to be setup nearly instantly.
Of course, what happens to your hardware if you decide to not renew your subscription? Well Cradlepoint isn’t in the bricking business, your hardware will still ostensibly function. Still, you’ll lose a substantial subset of features that may make it unsuitable for your deployment. Without cloud specific configuration, group deployment, and governance, you’re left with a pretty basic product at that point.
Cradlepoint is betting that this shift to subscription-only will pay off in the long run. For one thing, this ensures that every customer will be on their NetCloud platform. They think this will help them stand out in the market by making their solution easier to deploy across the board. They’re also projecting substantial cost savings for customers based on previously licensing the hardware and cloud support separately. Depending on whether you’re looking at the IoT, Mobile, or Branch SKUs, Cradlepoint projects the new subscriptions will be 6-30% cheaper over a three year period.
At the end of the day, network licensing can be a mess. As we discussed on the latest On-Premise IT Roundtable, licensing models matter. Providing simpler licensing across the board has a value in its own right. It’s definitely an interesting move by Cradlepoint.
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