Succeeding with SaaS: 3 strategic shifts required to leave the licensing model behind

EY analysts find that moving to a subscription model takes five to seven years and requires setting one set of KPIs for all business units.

Image: Ollyy/Shutterstock

Moving from licensing software to selling subscriptions is a company-wide transformation that requires rethinking procedures, people and policy, according to new research from EY. David Padmos, EY Americas TMT leader, and Ken Englund, EY Americas Technology Sector leader, wrote the report: “What to know when adopting subscription or consumption business models.” 

The financial implications of this shift are clear. IDC estimated in a 2020 report that software subscription revenues will grow by 16.6% while licensed software revenues will shrink by 6.1% between 2020 and 2024, based on a compound annual growth rate.

SEE: Do you need a SaaS platform to manage…

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