Digital technologies have become major disruptors in the construction space as industry professionals seek to improve operations and streamline processes with a continuous eye on efficiency, productivity and safety.
Although the adoption of construction technology is climbing steadily, some contractors still consider high upfront costs, complex deployments and the need for ongoing technology upgrades as a barrier to entry. For many, the new everything as a service (XaaS) purchasing model could help bridge the technology gap and facilitate new opportunities for digital connections in the construction space. Like the more common software as a service (SaaS) and infrastructure as a service (IaaS) models, everything as a service offers a “subscription” payment solution, in this case for an entire technology platform.
Although the subscription model is just gaining momentum in the construction sector, it’s big business elsewhere. According to a recent Gartner report, SaaS remains the largest market segment and is forecast to grow to $104.7 billion in 2020. The second-largest market segment is infrastructure as a service (IaaS), which is forecast to grow 13.4% to $50.4 billion in 2020.
In fact, Gartner analysts say that the effects of the global economic downturn are intensifying organizations’ urgency to move off of legacy infrastructure operating models. These subscription services offer greater flexibility, smaller up-front investment and predictable total costs, as well as scalability, on-demand support and automatic updates that traditional (perpetual) licensing models typically lack.
As more construction technology companies begin to offer subscription models, contractors can expect to see a clearer path to equipment upgrades and increased asset utilization within their companies, among other benefits.
The model gives contractors the ability to purchase construction hardware and software solutions and receive automatic updates to the latest technology versions for a fixed monthly cost. Typically, this also includes benefits like installation, training, service, support and a full warranty for no additional cost.
The technology bundles can include machine control, site positioning systems, correction services, office software and more.
For construction companies, in particular, a subscription model has big benefits. These include:
According to a recent Deloitte Insights report, flexible technology consumption enabled seven in 10 of those surveyed to reduce the cost of entry for adopting products/services and access a product or solution that otherwise would be too expensive. This also allows contractors to get new solutions into the hands of more users across the organization to foster experimentation and facilitate the increased use of newer technologies, such as AI and IoT-based solutions.
Although the subscription model is relatively new on the construction scene, the model’s many benefits are likely to have contractors subscribing to this new way of purchasing equipment well into the future.
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