Products are out; services are better for the environment

I know it’s not as simple as that, but this article in FastCompany flipped a switch in my head.

“The cutting edge, the thing that is getting more traction, is the effort to sell services rather than products,” Brown says. It’s a shift in perspective that can transform a business. It’s IBM selling you computing services-server space, processing capacity-rather than actual computers. A company selling computers wants to sell as many servers as possible, without much regard for the power they consume or cooling they require; a company that sells computer services wants the most efficient, cool-running servers it can make. Companies that are able to turn their business inside out this way find that addressing sustainability issues can change from a burden or cost to an opportunity for efficiency and profit.

Of course, if the vendor is responsible for providing the service, not the product, and for the disposal of the product, they’ll have a vested interest in making the product last longer, be more durable, and be cheaper and more efficient to dispose of.

At the same time, a subscription service over a one-time product sale gives recurring revenue and customer loyalty. It becomes harder to switch provider, which is good for the companies. Along with the halo effect of doing the right thing for the planet.