Printer-ink-as-a-service was the warning shot and we all just nodded. You bought the printer, you bought the cartridges, and HP still kept a foot in the door so it could decide later whether your hardware was allowed to do hardware things. The car people watched that and thought the only mistake was charging too obviously.
Are companies now incentivized to sell subscriptions instead of products?
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The HP printer example is still the nuts to me. To many users, it stops working, not because anything inside it broke, but because the ink subscription lapsed and the manufacturer's software disabled cartridges you already owned . The printer is physically there and it just stops working
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Printer-ink-as-a-service was the warning shot and we all just nodded. You bought the printer, you bought the cartridges, and HP still kept a foot in the door so it could decide later whether your hardware was allowed to do hardware things. The car people
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The HP printer example is still the nuts to me. To many users, it stops working, not because anything inside it broke, but because the ink subscription lapsed and the manufacturer's software disabled cartridges you already owned. The printer is physically there and it just stops working
Companies live for recurring revenue is better business than one-time revenue. Capital markets can model it more easily. That way you attract investors, there's a clear cash flow story and you have a business with profit margins. A customer tied to an ongoing account relationship is harder to lose than a customer who simply bought an object and walked away. Over time, the businesses that moved toward recurring revenue are rewarded for it, and the ones that did not were pressured to follow. This is not a conspiracy, executives didn't get together and aligned. It's just market incentives.
Software as a service
Software made the change obvious first. Adobe Creative Suite was once sold as a one-time purchase. Same with Microsoft Office, they used to sell lifetime licenses. Adobe got huge, and famous, once it dropped that model and moved towards Software as a Service (SAAS). Most software companies moved too, notoriously Microsoft. Funny thing is, Hardware companies do that too, with some extra steps. Amazon, for example, sells most of their devices at or bellow cost, hoping to make money with the user data (Alexa) or subscriptions.
Apple releases a new iPhone every year and, often, the 4-5 year old iPhones are just not functional anymore due to memory/storage capacity. They slow down older devices "to save battery", but that usually just influences users to buy new ones. Look, if you want to care about user battery then make it easy to configure it for users. It's their decision
The Drive
BMW Commits to Subscriptions Even After Heated Seat Debacle
You may not have to pay a monthly fee to keep your butt warm, but BMW isn't backing down from subscription features.
thedrive.com
With some extra steps, Apple can think now of their users as "Subscribed" to their iPhone. Maybe renewal is yearly, every 2 years, 4... But there's a subscription in there for hardware itself. What do you even do with a 5 year old iPhone nowadays? Or a 4 year old Apple watch? Apps don't work, security updates are not supported... Repair is difficult enough that replacement becomes the practical answer for many people. If it was just a matter of chips/memory, then sell them too and make it easy to replace the pieces that get better. The sale of the device is the front door to the recurring relationship. The phone still looks like a product even when the business around it behaves more like a service.
BMW tested the waters in
Cars are moving in the same direction. BMW tested heated-seat functionality as an $18-per-month subscription on cars that already had the necessary hardware installed.1 You already BOUGHT the hardware for heated seats. It's right there, in the car. But BMW wanted to get a subscription fee to be allowed to use it. It requires no Cloud support or any cost to them, but still they thought it reasonable to ask. More of the car's value now sits behind software gates, connectivity packages, and remote permissions. The car is sold as a durable good. The control over what it can do increasingly looks like a managed account. Most cars do the same with Mobile app controls, even when these features can connect through Bluetooth directly to the car (hence no need for cloud costs the company)
Companies are incentivized by the market
Like everyone else. This is not an evil conspiracy, just the way things work under our financial model. Sometimes it gets a bit ridiculous, such as when we got the "You will own nothing and you will be happy" propaganda, which was a bit misunderstood. It was leaning more towards socialist sharing rather than capitalist subscription, but it got backlash nonetless. People like owning things. I like owning things. I love my things, I want to feel that my car is mine, my laptop is mine, my house is mine. I paid for it and I own it. I'm not subscribed to it, or allowed by BMW to heat my seats, or by HP to use my Ink, or by Prime to watch MY movies.
It's not that every company relies on literal subscriptions. But there's always an MBA in the company that tries to spin a new way to charge us for something we used to own. Paying $1200 for heated seats may be too much to agree to, but a subscription for just $40 a month is probably OK. And another $10 to Netflix, $10 to Audible, $19 to HP... Those numbers are low but add up quickly. And, at the end of it, if you stop paying, you end up owning nothing anyway. Yes, BMW got backlash because they took it too far too soon, but little by little all companies are moving their products to be paid for, not owned.
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Reuters and The Verge coverage of BMW's 2022 heated-seat subscription rollout and reversal: https://www.theverge.com/2022/7/12/23204950/bmw-subscriptions-microtransactions-heated-seats-feature
Thoughts
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The piece frames this as ownership versus subscription, but the part that actually changes is who carries the liability. When the seat or the cartridge lives behind a remote permission, the manufacturer keeps a kill switch and you keep the depreciation. That asymmetry is the product. Outrage cycles like the BMW one don't move it, because the incentive sits in how the asset gets valued, not in any single executive's nerve. The only thing that has ever reversed it is a rule that forces interoperability or repair, and those are slow and unglamorous compared to a backlash that burns out in a week.
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I keep an offline build of one audio tool from 2016 on a machine that never touches the internet, specifically because the current version checks a license server on launch and I have watched that server decide I was offline and lock me out mid-session. The post calls the sale the front door to the relationship. For deprecated software the back door is the auth check nobody mentions at purchase. Sonos bricking older speakers through an app update was the same move in hardware: the box still works fine, the company just stopped letting it.
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Everyone here is right that finance loves recurring revenue, but the magnitude is the part that explains the BMW absurdity. A dollar of subscription revenue gets capitalized at something like 8 to 10 times sales in a halfway decent SaaS comp; a dollar of one-time hardware sale gets maybe 1 to 2 times. So the heated seat isn't an eighteen dollar decision, it's a repricing of how the whole company gets valued. They aren't selling you warmth, they're trying to make a hardware multiple look like a software multiple. The seat is just where the spreadsheet leaked into the parking lot.
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Everyone's debating incentives and I just want the boring thing: I want to own my software. Not lease it, not stream it, not have it phone home to decide if I'm still allowed to open a file I made. I run an old offline copy of one tool specifically because it does not require a heartbeat to a server I don't control. The printer example isn't a slippery slope argument, it's the actual mechanism. A device on my desk checks a payment relationship before it will do the one job it was built for. That's not maintenance. That's a remote kill switch with a billing department attached.
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Let me actually steelman the business case here because the thread is treating it like pure greed. Adobe moving to a subscription meant continuous updates, cloud sync, and a much lower entry price than the old $700 boxed license. A lot of customers genuinely came out ahead, especially people who could never justify the upfront cost. The model isn't inherently anti-consumer. It funds ongoing work that one-time sales structurally cannot. The failure mode is when the subscription gates something that costs the company nothing to deliver, like heated seats already wired into the car. That's where the logic stops being a business case and starts being a toll booth.
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The thing the post gets right that most people skip over is why finance actually loves this. One-time sales force you to re-win every customer every quarter, and that volatility is brutal for planning. Recurring revenue lets you model retention, expansion, and LTV with a straight face in an operating review. Once a few companies in a category get rewarded with a higher multiple for predictable revenue, everyone else gets pressured to chase the same shape. The HP printer move isn't an executive being a villain. It's a portfolio decision that survived three planning cycles because nobody senior wanted to defend lumpy hardware margins to the board.
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Printer-ink-as-a-service was the warning shot and we all just nodded. You bought the printer, you bought the cartridges, and HP still kept a foot in the door so it could decide later whether your hardware was allowed to do hardware things. The car people watched that and thought the only mistake was charging too obviously.
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Worth grounding this in the numbers people actually optimize against. Bain's work on subscription economics and the standard SaaS churn literature both land on the same point: a few points of monthly churn compounds into enormous lifetime revenue differences, which is why retention gets treated as the single most important metric in the whole model. The David Skok writing on SaaS metrics that half the industry runs on is explicit that you build the entire P&L around net revenue retention. Once that's the scoreboard, locking functionality behind a renewal stops being a tactic and becomes the org's definition of success. The behavior follows the metric. It always does.
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Adding the renewal-metrics reality from the team side, because it explains why this keeps happening even when everyone privately hates it. Once a product line is measured on renewal rate and expansion, every roadmap conversation quietly reshapes around what keeps people paying, not what serves them best. A feature that delights you once and then leaves you alone is a planning liability in that world. A feature that requires you to keep checking in is an asset. Nobody decides to be predatory in a meeting. The metric just keeps gently steering every choice toward the version where you can't leave.
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Genuine question because I'm early in this and still figuring out how the room actually thinks. When a team builds something like the BMW seat subscription, is there really nobody in the meeting who says out loud that this will make people furious? Or is it more that everyone can feel it's a bad idea but the recurring-revenue framing is so blessed from above that saying so just sounds naive? I keep trying to understand whether these decisions are made by people who don't see the obvious problem or people who see it and decide it's not their job to name it.
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