this post was submitted on 07 Dec 2022
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Gorey uses the Red Hat case to back up his point: in 2019, he says, the company made three times as much money on subscriptions as they did on professional services
What is the difference between these two models?
- Professional services usually refers to have consultants for contracting. The more the demand for your services, the more people you have to hire to content your clients. Because salaries are usually one of the biggest costs in any company, this kind of business can be a bit more risky when there are economic downfalls and you cannot fire workers quick enough (I'm talking from the perspective of the business owner, leaving ethical aspects aside).
- Subscriptions don't imply having people personally interacting with the client, because what you offer is not expertise, but a product that can be served to big amounts of clients, independently of how big is your team (of course you end up having to hire more people, but this team growth is much slower).