Enabling a Revolution in Business Models: Intel Capital Leads Xyte’s Series A to Enable Subscription-Based Business Models for Device and Hardware Manufacturers

By Roi Bar-Kat and Stephanie Cope

Before the turn of the twenty-first century, in order to buy software, people would typically buy installation CDs as a one-time purchase. However, as technology marched forward, so did buyers’ preferences, leading to a seismic shift toward and preference for subscription-based models. The advent of Software as a Service (SaaS) transformed the way we access, use, and pay for software, ushering in an era of flexibility, frequent updates, and unparalleled convenience. This paradigm shift also benefited the vendors by enabling novel business models and recurring revenue. 

We’ve all heard of SaaS. Now, as we stand on the precipice of a new wave of innovation, Xyte has emerged as the enabler of HaaS – Hardware as a Service. Xyte is supporting the revolution for device and hardware manufacturers in a manner akin to the software evolution of the past, equipping them with a holistic platform to differentiate themselves with outcome-based and usage-based solutions rather than only physical assets.

The Shift from One-Time Sales to Subscription-Based Models

The traditional model of selling hardware on a one-time basis is undergoing a seismic shift. As buyers increasingly seek flexibility, affordability (OpEx vs CapEx), and constant innovation, the subscription-based business model is emerging as a game-changer. Xyte's visionary approach focuses on enabling device and HW manufacturers to embrace this trend, transforming the way they engage with their customers.

In recent years, we've witnessed a significant shift in consumer behavior, with subscription services becoming the norm in various industries. From streaming services to software solutions, consumers are demonstrating a preference for access over ownership. The enterprise buyer, very much like the individual consumer, does not want an email server in their server closet but rather the ability to send and receive emails. More bluntly, most could care less about the device itself; their focus lies on the high-quality service facilitated by the device. Xyte's platform capitalizes on this trend, allowing device and HW manufacturers to transition from sporadic one-time sales to recurring revenue streams enabling stable customer relationships and personalization.

Building Strong Relationships: A Key Pillar of Success

Intel Capital is proud to lead Xyte’s Series A funding and looks forward to partnering with the team to continue accelerating subscription-based business models for device and hardware manufacturers.

In our due diligence process towards the investment, Xyte’s team demonstrated not only technical prowess but also a deep understanding of market dynamics and buyers’ motivations. Their commitment to creating value for manufacturers, system integrators and end-users was evident throughout the process, deepening Intel Capital's confidence in our decision to lead the Series A round.

But investing in a startup is not just about the numbers; it's about the relationships. Throughout the due diligence process, a strong and collaborative relationship developed between Intel Capital and Xyte's team. Open communication, shared values, and a mutual commitment to excellence laid the foundation for a partnership poised for success.

Our investment in Xyte represents more than a financial commitment—it's a strategic move to shape the future of hardware manufacturing. As the industry embraces servitization and a shift towards subscription-based business models, Xyte is at the forefront, driving innovation and ushering in a new era. Stay tuned as we witness the transformative impact of this investment unfold in the coming years.