graduating beyond subscription billing webinar
DESCRIPTION
The ability to adjust pricing, discounts, commitment-based offers for products and services is a powerful tool for driving service personalization, revenues and profitability. In combination with a full dashboard that provides visibility into corporate spending, revenue projections, the right monetization platform becomes a competitive weapon to drive customer and partner behavior. The ability to tailor a customer's service offerings via unique pricing models and volume or commitment-based agreements that span any combination of subscription and consumption-based services – will be the key to success in a services economy.TRANSCRIPT
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Graduating Beyond Subscription Billing
October 8, 2013
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Welcome
Alison MacLaughlinModerator
Marketing Director
MetraTech
Use the chat window to submit your questions for today’s webinar.
Follow the conversation on Twitter
#beyondsubscriptions
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Your Presenters
Mike WestVice President and
Distinguished Analyst
Saugatuck Technology
Jason MondanaroDirector of
Product Management
MetraTech
Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
The Limitations of Subscription Billing
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• Easy to understand
• Constraints
• Money on the table
Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Spear-tip
Pure plays and ISVs transitioning to Cloud begin with an initial set of offerings and gradually deepen their options and provide a broader portfolio
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Developing and delivering effective Mobile and Social software, user, and network interfaces
Building / changing / adapting our Sales compensation strategy & models
Partnering to manage more effectively the architecture, engineering, or development of our Cloud solution(s)
Building / changing / adapting our Sales and Marketing approaches / practices
Building new or more Channel partnerships to improve our Go-to-Market reach and effectiveness
Operating the Cloud Solution (e.g., customer on-boarding / customer service, provisioning, meeting SLAs, billing and payments, maintenance, account management)
Satisfying the needs of our Legacy customers as we decide how best to migrate to our new Cloud offerings
Building / changing / adapting our Pricing strategy / models
0% 10% 20% 30% 40% 50% 60% 70% 80%
Transitioning ISVsEight Leading Transition Challenges
#1 Challenge #2 Challenge #3 Challenge
Leading challenge overall:
Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Channeling
The role of the channel evolves as Cloud ISVs better understand how to go to market more effectively
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Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Constraints…
While subscriptions may work as a placeholder for monetization, as business strategy evolves to include new offerings and partners, the limits of a subscription billing system begin to create constraints
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…a solution provider may need to move beyond subscription billing to embrace elapsed-time rates, tiered rates, bracketed rates, metered-usage rates, day-of-week rates, time-of-day rates, or some combination of all of the above approaches. If the billing system will not permit that change, the solution provider may be doubly constrained, both on the top line and in the cost of operations…
Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Pivot?
Cloud ISVs that need to pivot toward different markets may find it impossible to do so and address those market needs
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Case Study excerpt…once launched in the SMB space, the Cloud Marketing PaaS discovered it would have no way to scale to large consumer enterprises, e.g., Pizza Hut, because they could not manage the complex billing that was essential for meeting the needs of those customers. They would be constrained from offering their solutions to large consumer enterprises because their current billing system could not go beyond subscriptions.
Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Evolve!
Cloud ISVs should not lock-in to a subscription billing approach. Rather their longer term business needs are better served by aligning with a more flexible monetization system that can grow with them, pivot if necessary, and evolve as business needs evolve:
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• Unlimited set of account, contract, agreement, product, service, sales and usage information to price, adjust, discount or true-up individual or aggregated events
• Aggregations applied to combination of accounts
• suppliers or channels that span multiple national jurisdictions and currencies
• Dashboard that provides the customer or partner with a status against the agreement in place
• Configurable threshold notifications to manage costs and meet commitments...
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Where Does the Trouble Start?
If you have Sales….
You have a billing problem…
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Starting is Easy
Total Number of Features Accessible
Price Point
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Boiling the Frog
“Infrastructure and combinations of business processes can come together however the business
model evolves.”
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Big Companies, Big Contracts
Frankfurt (€)Incremental price on service D
Block price on service A
Enterprise (£)% Discount on service A
Quarterly £ commitment on service B
Multi-bucket pricing on service D
Monthly £ commitment on all services
Incremental price service C for Engineering (Provided by 3rd party partner)
N
N
Tokyo (¥)Monthly ¥ commitment on all services
Included on service C
Block price on service A
N
London (£)
Included on service C
Single-bucket price service A
N Monthly service D events % Discount on service F
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Back to Back Transactions
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Content Platform Example
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Cascade of Systems or One Mind
VS
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Questions