The Big Shift Driving Tech Profits

Summary:

  1. The Big Shift Driving Tech Profits Big tech companies learning to look past the initial sale as subscriptions build an important base of recurring revenue.
  2. Videogame publishing giant Electronic Arts generated more than $2 billion in revenue in 2017 for its “live services,” which includes subscriptions to its gaming service known as EA Origins.
  3. Even Apple Inc., which sold nearly $200 billion worth of devices in its most recent fiscal year, has been touting the number of paid subscriptions to its growing range of services, and those of others sold through its App Store.
  4. The company made $9.7 billion in revenue last year just from subscriptions, up 52% from the previous year.
  5. Big tech companies learning to look past the initial sale as subscriptions build an important base of recurring revenue.
  6. AWS generated about $4.3 billion in operating profits last year, which is 52% more than the profits earned by the company’s North American retail arm on one-sixth the revenue.
  7. But the number of businesses that have turned buyers into subscribers, generating a recurring base of revenue, is growing across all of the tech sector.

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