Digital transformation became a hot topic nearly three years ago as the focus on it moved from the halls of Silicon Valley companies to the boardrooms of firms such as General Electric Co., Caterpillar Inc. and Ford Motor Co. Non-tech companies began to consider how to get products to be more like services, how to turn services into insights, and how to make insights more like experiences and outcomes.

“That natural transition as companies make a shift in business models is what’s driving and fueling the subscription economy,” said Ray Wang (pictured), founder and principal analyst at Constellation Research Inc.

Wang shared his insights during a visit to theCUBE, SiliconANGLE’s mobile livestreaming studio, and answered questions from host Jeff Frick (@JeffFrick), during the recent Zuora Subscribed event in San Francisco, California. They discussed how subscription models are changing the customer experience, as well as the way Tesla Inc. handled a firmware upgrade in its own unique style. (* Disclosure below.)

Recurring revenue has changed the experience

In his role at Constellation Research, Wang advises enterprise executives on business model disruption and digital strategy. He spoke of a noticeable shift in corporate thinking as recurring revenue models have reshaped the customer experience.

“Now, you have to delight customers. You’re always capturing their attention,” he said.

This might include a model where customers buy a hotel and vacation package and then rise to a different level experience as they add family members to the trip. “I’m buying a subscription to have an awesome vacation. It’s that freedom,” Wang stated.

The Constellation founder related one example that stood out for him when Tesla pushed a firmware upgrade to its car owners last Christmas. The lights and doors on the Tesla Model X were programmed for a light-show accompanied by music from the Trans-Siberian Orchestra to announce the change.

“It’s about getting the newest thing, getting delighted,” Wang concluded.

Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of Zuora Subscribed 2017. (* Disclosure: TheCUBE is a paid media partner for Zuora Subscribed 2017. Neither Zuora Inc., the event sponsor, nor other sponsors have editorial influence on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE