console.log()

Customer Success & Learning Subscriptions

Share via Twitter Share via Facebook Share via Linkedin Share via Reddit

Marketing’s reliance on education is not new. Consider the mantra Educate, Excite, Engage that Brad Chase, Senior Vice President of Microsoft from 1987 to 2002, used to promote Windows 95. There’s a reason education comes first in Chase’s strategic initiative.

The role of education to the success of technology companies has evolved in recent years, but a strategic focus on education has only gotten stronger. In the course of my research on IT and developer certifications and upskilling more broadly I have endeavored to understand what motivates an organization to create and maintain these programs. What does a vendor or vendor-neutral foundation gain from its education portfolio? What is the primary driver for these complex learning initiatives today, and how has it shifted since the 90s, the rise of cloud, the Covid-19 pandemic?

For enterprise technology firms, one phrase comes up again and again in relation to education: customer success. But how do organizations know if their programs are succeeding? What does success look like and can it be measured? In this post I begin the process of disentangling this knotty question by looking at the way subscription-based models are shifting how success is measured.

Subscription Based Learning

Randy Russell, director of certification for Red Hat speaks to the way subscription models have shifted how success is determined for their certification program:

Our contribution is really not so much our financial contribution to the company, although we do make a defined and important financial contribution. It’s really about customer success and adoption and mindshare and those sorts of things.

The important piece here is how do we ensure that our customers successfully deploy our products in their environments? How do we ensure that they’re successful so that they keep that subscription active for all those products that they’re using? Because that’s the key of the subscription model: you vote with your feet. And so it’s absolutely critical for us that the products are actually put into use and that they’re put to use successfully.

Let’s break this quote apart, and start by thinking through the notion of customer success. Smart businesses anticipate the challenges their customers may experience in order to provide solutions proactively. On an emotional level, success is tied to happiness which translates to brand loyalty. Success is also linked to retention—a must for the increasing number of companies that have joined Red Hat in operating on a subscription model.

What is the relationship between customer success—a well established pillar of sales and marketing—and more recent ventures into subscription-based learning? By ensuring that subscribers have immediate access to high quality educational materials (no more wading through mediocre YouTube videos and Medium articles) the vendor’s customers are empowered to reduce friction for their own teams of IT and developer professionals tasked with implementing, operating and maintaining these products—a win for vendors, practitioners, and businesses alike.

Today companies offer learning subscriptions to ensure that education is ongoing and on demand. Rather than upskilling just a few engineers, which created problems of siloed knowledge even before The Great Resignation, ready access to exceptional, multimodal educational materials (videos, articles, forums) makes the process of learning a part of the culture. As products evolve and change, convenient tutorials and skill-verifying exams are essential to ensuring that customers succeed in using their technologies.

VMware’s KubeAcademy, Tanzu Developer Center, and Spring.io all offer learning materials, courses, and learning paths concerning Kubernetes and other app modernization subject matter for free. But VMware Tanzu has also recently unveiled a learning subscription as part of their customer success strategy. According to John Funk, head of Tanzu learning at VMware:

we have shifted our mindset away from maximizing the revenue off of our training to really maximizing customer success.

These free and subscription-based educational materials offer a useful means for bringing in more entry-level learners as well as more advanced engineers interested in getting up to speed on the latest for these products.

In the past VMware’s learning materials and exams (not unlike most enterprise certification providers in this space) were prohibitively expensive for individual learners. Channel partners were expected to absorb the steep upfront cost of learning materials and exams: a bargain for ensuring that employees understand how to use the technology they invested in properly. However, this model excluded many folks that were interested in upskilling and reskilling with VMware. The move to subscription-based learning reflects a success-based strategy that depends on onboarding to the platform the greatest number of learners from all skill levels.

Instead of approaching their educational portfolios as sources of revenue, learning subscriptions use education to support different sections of the sales funnel. By inviting candidates with a range of abilities to the table, subscriptions serve as leadgen and encourage brand evangelism. They also allow technology companies to be more agile in their offerings by enabling a paired cadence of educational support in conjunction with significant product releases. Moreover, the revenue from subscriptions, although lower, is steady and ongoing which improves ARR projections. All of these advantages recommend subscriptions above a single courses model, especially for enterprise vendors. Enterprise vendors, in short, are increasingly willing to trade short term learning revenue for longer term account growth.

With all these benefits it’s no wonder the learning subscription landscape is getting crowded. Oracle’s Cloud Learning Subscriptions, which promise to “Accelerate Cloud Adoption to Transform Your Business,” is another player in this burgeoning market. Speaking of the competitive landscape for certifications, and what drives candidates to choose one program over another, the Senior Director of Oracle’s Global Certification Program Peter Fernandez explains:

The competition is more around where our products stand. So the certification is not driving the success of a product: the certification is riding the success and enabling the success of a product.

The complementary function that Fernandez identifies between learning materials and products is key to vendor-specific offerings. Although subscriptions often include vanilla lessons (Kubernetes, helm charts), they ultimately provide an opinionated path to education that requires selecting one company’s products and services over another.

The learning subscription landscape will continue to grow, and the challenge for vendors will be to convince independent learners and customers alike to select their products over the competition for their upskill journey. While costly subscriptions are intended for customers rather than university and high school students and other novices to the field, by offering free beginner-level courses as a teaser these early-career candidates are primed for career-long adoption.

We should expect to see more large technology vendors move from an education model that emphasizes individual courses and exams, to one supporting continuous learning in the name of customer success. This shift will have philosophical in addition to financial consequences. By playing into the “growth mindset”/ “always be learning” philosophy that pervades corporate speech, it will appeal to businesses that think of ongoing learning as endemic to their culture. Smaller vendors will likely be unable to offer a capacious enough spread of courses to make the subscription model feasible, but whether the gamble of moving to subscriptions gives vendors a significant advantage remains to be seen. Whether customers agree that having access to subscription-based learning materials is desirable will determine whether the availability of subscriptions acts as a meaningful competitive differentiator in the marketplace.

Disclosure: Red Hat, VMware, and Oracle are RedMonk clients.

No Comments

Leave a Reply

Your email address will not be published.