We’re living in a new economic reality today centered not on ownership and the trade of valuable goods for products, but on shared costs and subscription services. It’s a very new phenomenon—almost every definition and explanation of the sharing economy ties its inception to the dawn of the internet. The idea of the subscription economy has only gained traction and attention in the last 10 years or so.

But it’s clear that the golden age of the product economy is behind us. Subscriptions are where it’s at, and tech is leading the charge.

Cloud services is what many people think of as the subscription economy, which is natural. These days, it seems like just about everything is offered ‘as-a-service,’ and there’s a clear demand in business for cloud solutions. But as McKinsey & Company points out, there’s a significant difference between the deployment model and the business model. An on-prem solution can just as easily be subscription-based as a cloud offering.

It turns out that cloud is not, in fact, the biggest market demand; it’s flexibility in the form of subscription offerings. Demand for on-prem subscription software has increased significantly over the last few years—a fact that should help blunt the pain many partners face when transitioning to a recurring revenue model. Implementing subscription services for on-prem solutions can be far easier than transitioning all at once to the cloud.

Genesys, an omnichannel customer experience and contact center solution provider, this week rolled out subscription options for its PureConnect and PureEngage solutions. The expanded program eases the transition from capex to opex by essentially leasing its on-prem offerings, as well as continuing to offer subscription cloud services.

“Simply put, the market has been headed towards a subscription-based model for some time,” said Janelle Matthews, Senior VP of Solutions and Product Marketing at Genesys. “It’s the contact center market that’s lagged.”

All of the myriad methods of communication enterprises use today to service customers—phone, text, chat, social media, email—results in immense amounts of data that reveal actionable insights. The fastest way to process that data in real-time is through the cloud, says Matthews. Genesys’s cloud-only offering PureCloud has seen a 400 percent revenue growth last year alone, and the company says a significant number of new customers migrated legacy systems from Avaya, Cisco and other providers.

But not everyone is ready for the cloud—and that includes customers and partners, especially in highly-regulated industries like finance and healthcare. For MSPs, transitioning from both the deployment model (on-prem to cloud) and the business model (product to subscription sales) is too much change to weather at once. Having the ability to keep a legacy deployment model while instituting a new business model might be a saving grace. And partners don’t have to go all-in on subscriptions; the program still supports perpetual licenses, too.

“The subscription plan really works to lower the cost of entry and provides the financial flexibility to gracefully navigate change—which our industry has plenty of!” says Matthews.

The program is an example of how vendors are adjusting offerings to accommodate the needs of the whole channel, not just the big guys that have the financial resources to migrate to the cloud all at once. Despite the ever-growing number of ‘as-a-service’ solutions, the initial cloud frenzy seems to be calming down somewhat. There’s still a place for on-prem offerings, and there’s still a place for perpetual licenses.

Those places are rapidly shrinking, though, and partners that haven’t begun the shift to recurring revenue simply must face that reality, and soon. OEMs and ISVs that recognize the pain points associated with that shift and build programs that are sensitive to partners’ needs will go a long way toward propelling the channel fully into the new enterprise economic reality.