Here’s what you should look for in billing from cloud services: Forrester

The subscription billing market for technology services is growing, according to a new report from Forrester Research, and enterprises looking to offer eBusiness offerings to customers have a lot of options when choosing a platform partner.

The Forrester Wave: Subscription Billing Platforms, Q4 2015 found that the subscription market is growing as more eBusiness professionals across different industry verticals see the benefits of using more complex billing services. However, it noted that vendors differ significantly when comparing their B2B and B2C strategies, cloud architecture, usage-based business model capabilities, financial reporting and integration strategies.

Cloud computing, mobile devices, and the Internet of Things (IoT) are pushing companies to try out new product offerings that combine software, hardware, services and content while figuring out how to best monetize them, according to Forrester, and that means they are shifting from one-time perpetual sales or fixed monthly subscriptions to consumptions that blend one-time, subscription and usage-based billing, a shift that reflects how relationships with customers are changing to long-term partnerships, and that many companies are becoming more software-driven.

Every industry has been affected by the shift, and while it is B2C disrupters such as Netflix and Zipcar that have garnered the lion’s share of the attention, the growth of subscription billing platforms has been driven heavily by B2B scenarios, Forrester’s research shows, where the subscriptions model is far more complex.

Enterprises have several reasons to repackage and re-engineer products and services, or even to develop new ones exclusively for monetization by subscription: desiring “stickier” customer relationships, wanting to capitalize on the cloud, and interest in experimenting with connected products. In addition, enterprises are seeking more customer insights, and a recurring subscription allows them to build long-term relationships, monitor engagement and evaluate customer sentiment. This in turn informs new or improved offerings.

In its report, Forrester supplies a number of examples across industry verticals. In the automotive sector, there’s services such as OnStar offering subscriptions for drivers to access in-vehicle connectivity, security, remote diagnostics and recovery services; in education, Lynda.com delivers online courses, tutoring and practice exams; and, an agricultural manufacturer can sell connected IoT devices and a subscription service to access agronomic data.

Forrester outlines eight “core buckets” of capability for subscription billing platforms that eBusiness professionals should be looking for. The first would be a product catalog feature that allows them to configure, model and test potential future business and pricing models without requiring major changes to back-office systems by IT staff. Second are notifications that allow for management of contract expiration warnings, activation notices and failed billing attempts to provide a consistent end-consumer experience. Third, there needs be invoicing capabilities that support complex consumption-based business models, including sophisticated design tools. Related to invoicing is the fourth capability, which is usage metering, as customers expect a recurring billing platform to ingest a large amount of consumption data from devices, services and products.

Other capabilities Forrester includes are finance management, business intelligence and analytics, billing, and account management. In B2B use cases, the end user is rarely the buyer, so the latter is necessary to make the subscription billing platform appealing to a corporate customer.

Forrester also outlines other key criteria beyond capabilities that enterprises should look for in a subscription billing platform vendor: a profitable and stable business with at least half a million dollars in managed subscription revenues; a standalone offering that is not dependent on other enterprise applications, and a focus on the needs of enterprise customers.

The research firm included eight vendors in its assessment: Apttus, Aria Systems, Digital River, goTransverse, SAP Hybris, Recurly, Vindicia and Zuora, and concluded that Aria, SAP and Zuora led the market with developed core industry vertical experience, while the remaining offer competitive platforms depending on specific use cases.

 

 

 

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Gary Hilson
Gary Hilson
Gary Hilson is a Toronto-based freelance writer who has written thousands of words for print and pixel in publications across North America. His areas of interest and expertise include software, enterprise and networking technology, memory systems, green energy, sustainable transportation, and research and education. His articles have been published by EE Times, SolarEnergy.Net, Network Computing, InformationWeek, Computing Canada, Computer Dealer News, Toronto Business Times and the Ottawa Citizen, among others.

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now