Cost and Performance Gains With Hardware and Software Subscription Models

Subscription-based models — offering an alternative to one-time purchases or perpetual licenses — are becoming more common in both professional and personal settings. Whether it’s machine control systems, office equipment, software or beyond, consumers are increasingly drawn to the flexibility and convenience that subscriptions provide. For the construction industry, software and hardware subscriptions offer cost, predictability, scalability and convenience advantages. They can also help contractors standardize processes across their organizations, remain at the forefront of technology adoption and attract new employees.

According to Global Market Insights, the global construction software-as-a-service market size was valued at $13.3 billion in 2023 and is projected to grow at a compound annual growth rate of over 10.8% between 2024 and 2032.

Staying current with construction technology assets makes contractors more competitive on projects and recruiting efforts. For instance, machine control is no longer a concept for the future  —  it’s here, and businesses run the risk of falling behind if they aren’t integrating solutions to bring their fleets into this new age. Likewise, spreadsheets and paper-based processes put contractors at a disadvantage against competitors leveraging the efficiency, accuracy, immediacy and data sharing benefits of specialized software for estimating, operations, equipment maintenance and financial management. And, since the construction industry is constantly trying to recruit new talent, technology is one way to help attract and retain younger employees who tend to expect it.

Affordable Entry Point and Transparent Recurring Costs

Subscriptions streamline the buying process by bundling everything customers need  —  cutting-edge hardware and software, maintenance, protection plans, field-to-office integration and cellular connectivity  —  into a single, manageable monthly payment. This model reduces the upfront investment typically required for new technology, shifting it from a significant capital expense to more manageable monthly or annual operational costs. For contractors, this approach supports business growth, cost control and competitiveness in a tight construction market.

Tiered subscription offerings are another option to fit varying contractor needs, so a company can purchase their hardware outright, or even bring their own, and subscribe to the level of software, protection plans and hardware services that fit their business.

Consider these cost benefits for subscription services:

• Contractors purchase only what they need, spread payments out over time and adjust the subscription when requirements evolve.
• The cost of technology is a monthly expense instead of an upfront capital expense. This lowers cost of entry, allowing contractors of all sizes to adopt state-of-the-art hardware and software that may otherwise be out of reach. Additionally, smaller contractors can benefit from lower long-term debt ratios and improve their overall credit ratings.
• Subscriptions allow contractors to gain the economic benefits — at no additional cost — of the newest tools and functionalities as soon as they are released.
• Cloud hosting of software minimizes the need for contractors to purchase and maintain  hardware and IT infrastructure, leading to significant reductions in upfront and ongoing costs.
• Cloud solutions also offer sophisticated cybersecurity protections — with continuous, automatic updates — reducing costs and risk.
• Larger organizations may achieve faster internal approval cycles when the costs hit monthly operational budgets instead of capital expense budgets.
• If a technology assurance plan is purchased via subscription, contractors can eliminate any unexpected repair or maintenance costs.

Stutsman-Gerbaz, a Colorado-based civil contractor, leverages technology subscription services to run its business more efficiently and effectively. According to the company, machine control solutions provide its projects with real benefits, but the initial capital investment to outfit all of its machines with 3D grade control was daunting. However, under a subscription model, the company was able to do more work in less time, with greater accuracy, while keeping its indirect expenses the same or even lower.

Trimble Inc.

Built-in Tech Assurance

Another key benefit of the subscription model is technology assurance. With technology evolving quickly, staying current with the latest innovations — from machine learning and predictive analytics to enhanced user interfaces, data processing and reporting capabilities — helps contractors maintain a competitive edge and improve profitability.

Stutsman-Gerbaz recognizes that its jobsites are more efficient and productive since moving to a technology subscription. According to the company, it is now able to do more with a smaller crew. The company notes that five years ago, it was able to run seven jobs daily, and today, it can run 15.

The Latest and Greatest Is Always Available

Obtaining technology via subscription makes it easy for contractors to leverage the latest versions of software and hardware to tackle today’s toughest construction challenges. Cutting-edge Global Navigation Satellite System (GNSS) technology, for example, provides considerable connectivity advantages for utilizing machine control systems in challenging conditions, such as under heavy tree canopies. Specialized equipment also benefits from maintenance software that automates proactive, preventive maintenance and streamlines processes. Contractors with a subscription would get these upgraded capabilities automatically at no additional cost.

Consistency and Standardization

For hardware, firmware and software, subscriptions also make it easier for contractors to get all of their employees and equipment operating on the same updated version of the technology, which paves the way for standardizing processes, training and technology support across the organization. Buying different versions of the technology over time can lead to inconsistencies and compatibility issues for contractors.

According to Stutsman-Gerbaz, every operator is now running on the same platform. When systems are aligned and a newer operator is not familiar with the system on the dozer, any excavator operator is able to share their expertise, given that it offers the same interface across different machines.

The company also notes it can keep current with new sensors, harnesses and cables along with software upgrades on desktops, rovers and tablets because it’s all done automatically. The subscription model not only provides end users with access to upgrades or new equipment when necessary, but also a local distributor to deliver and/or install it. 

The subscription model offers customers genuine peace of mind on flexible terms while fostering a collaborative partnership between technology providers and contractors. It’s essential to choose a provider you trust and envision working with over the long term.