The document discusses the limitations of subscription billing systems for cloud Independent Software Vendors (ISVs) as their business strategies evolve. It emphasizes the need for more flexible monetization approaches that adapt to market demands, such as tiered rates and metered usage, to avoid constraints on growth and profitability. A case study illustrates how a lack of billing flexibility hindered a company's ability to scale into larger enterprise markets.

1. 1
Graduating Beyond
Subscription Billing
October 8, 2013

2. 2
Welcome
Alison MacLaughlin
Moderator
Marketing Director
MetraTech
Use the chat window to submit your
questions for today’s webinar.
Follow the conversation on Twitter
#beyondsubscriptions

3. 3
Your Presenters
Mike West
Vice President and
Distinguished Analyst
Saugatuck Technology
Jason Mondanaro
Director of
Product Management
MetraTech

4. Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Page: 4
• Easy to understand
• Constraints
• Money on the table

5. 5

6. Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
 The role of the channel evolves as Cloud ISVs better understand how
to go to market more effectively
Page: 6

7. Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
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…

8. Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
Cloud ISVs that need to pivot toward different markets may find it
impossible to do so and address those market needs
Page: 8
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.

9. Copyright 2013 ǀ Saugatuck Technology Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com
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:
Page: 9
• 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…

11. 11
Starting is Easy
Total Number of Features Accessible
Price Point

12. 12
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

14. 14
Back to Back Transactions

15. 15
Content Platform Example

16. 16
Cascade of Systems or One Mind
VS

17. 17
Questions