The Library Systems Products of 3M recently announced that it would begin offering a new pricing option based on fixed subscription fees for libraries interested in implementing its products. The model resembles a software-as-a-service model that allows a library to trade the large up-front costs for their automation system for a fixed annual fee. The subscription model may appeal to libraries with budget situations that are more able to accommodate a monthly or annual fee rather than a large capital expense to purchase equipment with ongoing maintenance fees at a lower price point.
The concept of annualized pricing for technology equipment isn't new. Many libraries prefer to lease personal computers, copy machines or scanning equipment. This option may allow some libraries to implement RFID or other self-service options that they otherwise would not be able to due to the lack of upfront capital. Many libraries find themselves with extremely constrained budgets, but still experience increasing levels of activity and are interested in technologies that might help them keep up with fewer personnel.
The subscription pricing model differs from a leasing arrangement in several ways. The subscription program includes not only the physical equipment, but also service and support, with options to include materials like RFID tags. Unlike a lease, the library does not build equity on the equipment during the subscription. When the term of the subscription agreement expires, the library can exercise a number of options, including initiating a new subscription with more current equipment, expanding or upgrading the system and negotiating a new subscription fee, or ending the arrangement and returning the equipment.
The subscription model will not be limited specifically to RFID equipment, but can also include its electromagnetic security products and barcode-based self-check stations. Any of its own products, or those of Checkpoint that it distributes and supports, are eligible for the program. 3M has a longstanding partnership with Lyngsoe Systems for automated materials handling systems, which are not part of this program at this time. Although 3M anticipates that many libraries will find the subscription model attractive, its traditional purchase and support pricing will continue to be offered. Subscription pricing only represents a new option.
Libraries considering the subscription model would perform a total cost of ownership analysis that would compare the expenses with purchasing equipment and paying standard maintenance fees with the total expended for that period on subscription pricing. This analysis would need to extend past the years beyond the initial subscription term given the need to continue or renegotiate the subscription, purchase new equipment, or discontinue self-check when the subscription expires.
The subscription arrangement will be customized for each library. The equipment involved will naturally be selected to meet the needs of the library, which will determine the cost of the subscription. According to Joan K. Detloff, Core Portfolio Manager for 3M Library Systems and leader of the launch of the subscription model, 3M wants to build in flexibility, not just in terms of the equipment included, but also in the length of the subscription term and it payment options. Subscriptions can be paid monthly, quarterly, or annually depending on the preference of the library.
3m has launched the subscription program in the United States only, though its international subsidiaries may follow at later date.
