Life as a Service (LaaS) - and the rise of the Super-Bundles

By Siavash Habibi, COO at BuddyCompany

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There was a time when I used to be in awe when I saw people have massive movie, or CD collections. They had all these options at their fingertips. Today, it’s not just unnecessary to have a movie collection, but the pure thought of having to take a disk out, putting it in a player, using a separate remote, and do the process all over again, when we want to watch something different, can be a real pain. Having a bundled subscription for a streaming platform such as Netflix or Spotify, is not only more affordable for enthusiasts, but also far more convenient - and we don’t have to own a single disk for it. 

Of all the things we have and use in our everyday life, which do we truly need to own? Do we really need to own our TV sets, or our entertainment systems? What about our laptops? Many are already in practice leasing their phones, with the promise of a trade-up or a discount when handing it in for a new one. Thinking about it, there are few things we really need to own. Recent studies show that subscriptions are on a rise and that many people are planning to increase their subscriptions. When provided with affordable and convenient alternatives to owning our products and services, we don’t seem to mind switching to subscription models, and soon perhaps Life as a Service (LaaS) will not only be a term to describe this phenomenon, but an actual offering. 

There’s also the element of discovering something new. Previously, we would have to rely on that one friend who always seemed to be on top of the latest. Now the data gathered from these aggregator services like Spotify or Netflix, give us recommendations based on our previous behavior so that we discover new things with a higher chance of us liking them. We are discovering new artists, movies, restaurants, books, coffee flavors, perfumes, beverages, and much more, based on our previous choice-patterns by using these aggregators and bundled subscription services. Furthermore, we are being provided the latest updates and options which help us constantly stay ahead of the curve. In a fast changing world, the leasing option could end up being cheaper than a device that is quickly outdated. 

The subscription model is a proven strategy across many industries. It provides recurring revenue streams rather than one-off sales, a better outlook on future earnings which attracts more investors, and places a stronger emphasis on continuous value creation. The effort and resources saved from not having to continuously sell across multiple channels, can instead be allocated toward keeping customers happy by improving the product or service. 

For the consumer electronics industry, it is only natural to switch from selling hardware and software, to offering businesses an “office as a service”. Some retailers are already developing this offering. Basically, companies can subscribe to all the tools necessary for their operations and size, where technical support is included and devices are upgraded when they become outdated. This is especially attractive for small and medium sized businesses (SMEs), which are too small to invest in an internal IT department or to allocate the necessary resources toward understanding what the best set-up is for them - not to mention maintaining it. 

Let’s take this idea one step further. What if the property manager of an office building creates a bundle together with a consumer electronics retailer, and a tech-support company, and offers “workplace as a service” for a bump in the rent. This could be especially interesting for all the co-working spaces popping up - the most progressive of which offering mindfulness, yoga, and meditation classes as part of the monthly cost. 

As always, new phenomena set behavior changes; and if we start having more extensive bundles offered in the workplace, we will start expecting them at home. Brands should start thinking outside the box and offer value for the customer. For the future, that may mean for them to be more open to collaborations and bundling with other brands and service provides. For instance, imagine a Telco company that offers you “home entertainment as a service”, where you get a high speed internet, a TV, a speaker system, a tablet, streaming service(s), channel packages, and all the cables including installation, support, and upgrading when needed. Perhaps even with an upgrade available for a “home-office as a service”. Here is one step further - it could be a property manager offering a bundle of cleaning services, dry cleaning services, grocery shopping services, babysitting, tutoring, car washing, handyman services, tech-support services and more as a “Home as a service” or “Convenient living as a service”. Or what about an insurance company that combines bundles from the property manager, the internet service provider, with a mobility bundle that includes alternative modes of transportation - into a super-bundle called “Life as a Service” (LaaS). 

The problem, or rather opportunity with that - you choose - is that it creates competition. Energy companies, insurance companies, the tech giants, and others can compete about consolidating the different bundles into super-bundles and see who provides the best LaaS offering for customers. It would create a rivalry of the super-bundles, which either results in a healthier competition than before, or the giants will become even bigger. Imagine a LaaS offering by Google, or Apple, or Alliance Residential. Would you prefer a super-bundle from a tech company or the company that manages your apartment building? Which would come up with a better offer? One has all the data in the world about your usage and you can order everything through a voice assistant like Siri or Alexa, or one that knows the ins and outs of your living environment. The opportunities are endless. Banks and fintech companies are already putting out new services to help customers manage their multiple subscriptions, and in doing so gaining a better understanding of which subscriptions could be paired together across different geographies and demographics. 

The practical aspect of this is of course a difficult endeavour, since it means getting companies from different industries to agree on being part of a bundle together. Still, it’s not unprecedented. Who would have thought that record companies or major studies would agree to lend the rights of their content to companies like Spotify or Netflix? As I understand it, it was not a straightforward endeavor. Soon enough however, “the powers that be” caught on and these platform companies increased their portfolio to mostly everything that’s out there. It’s reasonable to believe that creating these partnerships for super-bundles will become a necessity for continued growth and value creation for customers. 

The race for convenience is far from over, and companies have more to gain from cooperation than working in silos. We are only at the beginning of the digital transformation. We are only at the beginning of digital platforms popping up to offer different services, shared or direct services. Larger incumbents have much to gain from partnering up to extend their reach without massively investing in building it themselves. 

At BuddyCompany, we see the larger bundles such as “office as a service” or “home entertainment as a service” as inevitable, and we are eager to see what the super-bundles will look like. Either way, we look forward to creating better value and convenience for customers by working together with other industries.