Should Hardware Be on Consumption?

I recently read an article – Does hardware even matter anymore? The author comments that although managers recognized the impact of Moore’s Law ie, computing or hardware power doubles every 18 months, software “power” is transforming industries at an incredible rate, yet it hasn't received the same acknowledgement.

Software power is changing the way we interact with each other on a daily basis and improving the efficiency of typically very hardware based products.  For example, the writer talks about the improvements in the automotive industry.

This made me think that given we are starting to see the emergence of subscription and consumption based software models, why couldn’t hardware be modelled on the same approach?

Of the vendors I work with, most if not all regard themselves as software designers and builders even if their technology is based on a hardware platform. Hardware today for them really provides the delivery platform for which the software operates. So, if hardware is just the delivery mechanism of the software, then why couldn’t you wrap it up with the software subscription even?

Here’s how I think it could work:

Consumption based programs can be run in a few different ways. For example, there are some that offer a rental component or fixed amount and also a consumption component or variable amount. Other alternatives include a straight usage amount or a minimum monthly committed amount (like most internet service providers).

For example, routers that are used in IT infrastructure to provide coverage to users usually rely on central device that connects out to remote ones across various office areas. What if they were billed based on data being sent/received on a monthly basis?  

Another suggestion is that typically companies purchase/supply a new device every time an employee starts (notwithstanding BYOD) perhaps the supplier could set a minimum committed number of devices and then add any additional devices (say if a company is in growth mode and is frequently adding new staff) as a per user cost. Or as suggested above, could the hardware even be included as part of the monthly subscription for the operating system on which it runs?

At my distribution company we already offer storage on a true consumption model through our channel partners instead of waiting for the vendors to change.

So what’s stopping the vendors from changing? Revenue.

Many vendors know that if they go down that route, their share price will be hammered but as we all know, technology change is constant and wouldn’t you rather be in the box seat innovating to drive the pace of change than have it thrust upon your business?

Tell us what you think.