Recurring Revenue eBook

HARNESS THE POWER TO BOOST RECURRING REVENUE From software to hardware to IoT, technology companies are getting ahead by introducing new and innovative ways to deliver their products and services via subscriptions. Want to know what you need to maximize recurring revenue and monetize new services? Read on to learn how a modern billing solution can energize your business today!

CHANGES IN THE MARKET BRING NEW OPPORTUNITIES FOR DIFFERENTIATION AND GROWTH As the pace of digital transformation intensifies and technologies advance, companies are at greater risk of being disrupted. DIGITAL TRANSFORMATION SHOWS NO SIGN OF SLOWING With few exceptions, companies across all industries are continuously introducing new digital services. Changing market forces and customer expectations are driving organizations to accelerate their digital transformation initiatives to pursue new business models and By 2020, at least 55% of organizations will revenue streams. be digitally determined, transforming COMPANIES ARE INNOVATING AT GREATER SPEEDS markets and reimagining the future through By leveraging the vast amounts of accessible and scalable computing power and a range of new business models and digitally 1 software technology from microservices to open APIs, companies are able to introduce new enabled products and services. products and digital services faster than ever before. - IDC CONSUMPTION-BASED PRICING MODELS ARE BECOMING THE NORM For some time, consumers have embraced a variety of usage-based subscription models, from on-demand, to pay-per-use, to tiered use and so on. Corporate buyers now expect the same consumption and flexible ownership options along with similar customer experiences. The changing nature of products is disrupting value chains, SUBSCRIPTIONS DELIVER CRITICAL INSIGHTS AND ANALYTICS forcing companies to The opportunity to leverage the data, analytics and insights from subscriptions to better rethink and retool everything understand customer preferences and deliver exceptional customer experiences is driving they do internally.2 even more momentum toward consumption and usage-based services. - HARVARD BUSINESS REVIEW 5G IS SPURRING A TSUNAMI OF CONNECTED DEVICES AND SERVICES The forthcoming proliferation of 5G technology has triggered a new wave of loT products and services, most of which, if not all, will be delivered to the user via subscriptions of various complexities. IS YOUR TECH STACK FIT FOR PURPOSE IN TODAY’S FAST CHANGING ENVIRONMENT? 1. Source: IDC: IDC Predicts 55% of Asia/Pacific Organizations Will Be Digitally Determined by 2020, Transforming Markets Through New Business Models and Digitally Enabled Products and Services, Page 1 of 6 Singapore, 2 November 2018, Doc #prAP44426218 , 2. Source: Harvard Business Review: How Smart, Connected Products Are Transforming Competition, North America, November 2014

CHANGES IN THE MARKET BRING NEW OPPORTUNITIES FOR DIFFERENTIATION AND GROWTHINNOVATORS AND MARKET LEADERS DON’T SIT STILL As the pace of digital transformation intensifies and technologies advance, companies are at greater risk of being disrupted.Progressive technology innovators have modernized their billing systems and embraced subscription models with great success. ADOBE, the popular creator of multimedia and creativity software products, including Photoshop and Acrobat, boldly upended its traditional sales model and moved from selling shrink-wrapped software to offering subscriptions of varying lengths, levels and By 2020, all new entrants and price points. After moving to a SaaS model, Adobe experienced a 41% increase in 80% of historical software vendors revenue and secured 3 million new subscribers. As of 2017, recurring revenues from will offer subscription-based subscription represented 86% of its total revenue.5 business models, regardless of whether the software resides 3 on-premises or in the cloud. HOOTSUITE, the social media management platform company, shifted from a free to - GARTNER a paid service by introducing a range of value-added features and services delivered to the customer via a subscription-based freemium model. Within six months following the shift, Hootsuite saw its customer base increase by more than 40%. Since 2014, Hootsuite has grown its subscriber base from 10 to 18 million and has achieved 35%+ year-over-year revenue growth among new enterprise customers.6 Vendors who rolled out new subscription models were able to acquire new customers 4 on average 20% faster. VMWARE, an enterprise virtualization leader, moved away from perpetual products to - GARTNER introduce new subscription-based services. The company established a subscription delivery platform to integrate the customer service and support experiences for customers to view purchases, file support tickets and purchase add-on services, all while supporting a large global reseller channel. Since the initial transition, VMware has continued to expand its 7 subscription offerings and has realized double-digit revenue growth. 3. Source: Gartner: Forecast: Cloud Subscription and Recurring Billing Management, North America, 2019, 26 February 2019, G00370035 4. Source: Gartner: Key Lessons for Transitioning from Perpetual to Page 2 of 6 Subscription Software Licensing, Published: 3 January 2019 ID: G00377999, 5. Source: Adobe’s Cloud-Based Subscription Will Continue To Grow Its Revenue, North America, 11 September 2017 6. Source: Hoot- suite Closes Out 2018 Celebrating 10 Years of Customer Success, North America, 31 January 2019, 7. Source: The Good Times Continue for VMware, Salesforce and Many Other Software Names, North America, 2018, December 5

IS YOUR CURRENT TECHNOLOGY STACK HOLDING YOU BACK? Your existing systems may not be able to support your new business strategies for many reasons: HOMEGROWN SYSTEMS THAT REQUIRE MORE DEVELOPEMENT Do you have a homegrown monetization system that, even with upgrades and attention from an internal team of developers, is not able to keep pace as monetization models have evolved? LEGACY SYSTEMS THAT DON’T SUPPORT SUBSCRIPTIONS Do you have one or even multiple ERP or financial accounting systems that are only built to handle one-time transactions? Is custom code required to bring new recurring revenue products to market? MULTIPLE SYSTEMS THAT DON’T TALK TO ONE ANOTHER Have you inherited multiple, disparate billing systems as a result of acquisition activity – systems that do not or cannot speak to one another or provide a single source of truth relied on by marketing, products sales and financial teams? SPREADSHEETS THAT CAN’T SCALE Did you launch a subscription business using complicated spreadsheets that you have been unable to scale as your business has grown? CLOUD BILLING SYSTEMS THAT ONLY SUPPORT SIMPLE SUBSCRIPTIONS Do you have a simple subscription management system, but your competitive environment has since evolved and your customer preferences have since become more complex. Have your customer preferences become more complex and, as a result, led to a growing need for more options? Organizations undergoing digital transformations and bringing new subscription businesses to market often overlook the billing and monetization system – a critical component required to capitalize on the opportunities of a recurring revenue business model and deliver an enhanced customer experience. Page 3 of 6

THE ORGANIZATIONAL IMPACTS WHEN BILLING IS NEGLECTED ARE WIDESPREAD You know you need to introduce new subscription-based digital services, but doing so without the right monetization platform has implications across the business. PRODUCT MANAGER IT DIRECTOR CONTROLLER We know which products we We can’t keep up with We are under pressure to want to bring to market. We the demand for new reduce revenue leakage from just can’t monetize them. subscription products. billing inaccuracies. Outdated monetization systems Launching new services with old The shift to a recurring revenue model hamper your product teams’ ability systems not fit-for-purpose places an can be challenging for finance teams to effectively monetize new products, undue strain on your IT organization. responsible for maximizing revenue limiting pricing flexibility and Custom code is difficult to maintain and reducing revenue leakage. extending time to market. and scale. CUSTOMERS Why can’t we get both services on one bill? Your customers don’t want multiple bills from the same service provider; they do want invoices that are clear, consistent and without surprises. Inadequate systems not only alienate customers, but they negatively impact the customer service and sales organizations serving them. Page 4 of 6

THE BILLING AND MONETIZATION SYSTEM YOU NEED RIGHT NOW Technology companies need a modern billing and monetization system that not only supports but propels growth and improves the customer experience. IN THE CLOUD Cloud-based billing systems are futureproof and can be deployed with great speed and at lower costs with no hardware or database purchase requirements. MAKING CONNECTIONS By creating a single, unified environment, a modern billing platform should allow you to introduce new digital offerings without abandoning your traditional product lines. A PATHWAY TO NEW DIGITAL SERVICES Today’s monetization system should allow you to create, introduce and monetize new digital services and generate new revenue streams with speed and agility. FROM SIMPLE TO COMPLEX A modern monetization system should be able to handle all subscription types, from one-time transactions to simple subscriptions to complex, usage-based models and so on. ENHANCED CUSTOMER SERVICE Armed with insights and analytics and capabilities only available in a modern billing system, you can connect and engage with customers at a deeper level and more successfully meet needs and preferences. Page 5 of 6

THE TIME TO ACT IS NOW VALUABLE RESOURCES ARE BEING SQUANDERED The financial, hardware, software and human resource costs you are sinking to maintain a homegrown monetization platform or customized ERP solution are simply being wasted. COMPETITORS ARE SPRINTING AHEAD OF YOU Your competitors and unexpected entrants to your market are moving quickly to disrupt your industry and gain the upper hand. YOU’RE MISSING THE PIECES NEEDED TO EXECUTE You have the right product ideas, creative capabilities and opportunities, but finance and IT are powerless to support your rapid innovation without the right technology. MONEY IS BEING LOST Your existing subscription and recurring revenue models are plagued by inaccurate and untimely billing, payment failures and dunning challenges leading to revenue leakage and lost dollars. CUSTOMER EXPERIENCE AND RETENTION IS AT RISK You are missing an opportunity to engage your customers in a meaningful way, jeopardizing customer retention and renewals. THE PATH TO RECURRING REVENUE SUCCESS A leading networking equipment company with a well-established brand in consumer retail, B2B and the communications industries saw an opportunity to generate new revenue streams by entering the burgeoning IoT market. The company had no experience launching IoT products or recurring revenue models. The organization wanted to bring the new product line to market quickly but lacked the billing systems or resources necessary to begin generating and maximizing IoT revenues. The company selected Aria’s cloud-based monetization platform, due in large part to its ability to easily integrate with existing CRM, ERP and payments systems; sync customer data with the existing provisioning system; track behavior and stand up an exceptional self-service experience. It took the company less than a year following the deployment of Aria’ platform to successfully launch new IoT-enabled devices and related subscription services. Since then, both the total number of accounts and monthly revenue have tripled. The company is projecting exponential growth as the scalable nature of Aria’s system allows them to continue launching new and innovative products, services, packages and bundles as the scalable nature of the Aria system will allow them to continue bringing to market new and innovative products, services, packages and bundles. Aria has allowed us to keep pace with the growth – whether it’s 10, 20 or 1,000 times over – we don’t have to worry about the billing system creating a bottleneck. – Chairman and CEO

LET ARIA SYSTEMS HELP POWER UP YOUR FULL RECURRING REVENUE POTENTIAL TODAY! REQUEST A DEMO ABOUT ARIA Aria Systems’ cloud-based monetization platform is the analysts’ choice, top ranked by leading research firms. Innovative enterprises like Adobe, Allstate, Comcast, Philips and Subaru depend on Aria to accelerate time to market and increase flexibility, enabling them to maximize customer value and grow recurring revenue through subscription and usage-based offerings. For more information, visit www.ariasystems.com. FOLLOW US Copyright © 2019, Aria Systems, Inc. All rights reserved. Aria Systems and the Aria logo are trademarks or registered trademarks of Aria Systems, Inc.