SAN FRANCISCO - May 17, 2012
Aria Systems, the leading provider of cloud billing and subscription management solutions, today announced the results of “The Anatomy of a Recurring Revenue Business” report, a study based on the input of more than 1,000 respondents from companies across different market sectors about the dynamics and infrastructure challenges associated with recurring revenue businesses. Sponsored by Aria Systems and conducted by Incyte Group, the report uncovered that nearly half of all businesses in the United States (47 percent) currently have, are in the process of developing or are investigating recurring revenue offerings.
Further indication of the increasing popularity toward recurring revenue based offerings include: of those U.S. companies with interests in offerings that generate recurring revenue; 61 percent already provide them; 20 percent are in the process of implementing or formulating them; and 19 percent are in the process of investigating their viability.
For many companies, the one critical challenge faced when building a recurring revenue based business was that of providing the enabling technology necessary to support and deliver the offering(s). According to the majority of respondents, companies were forced to spend a great deal of time and effort on building proprietary systems and integrating them with existing enterprise applications in order to bring these offerings to market.
For instance, companies that needed to interface with traditional Support (CRM), Ordering & Provisioning (ERP) and Finance & Accounting (ERP) applications, had to build specialized Billing & Collections systems and eStore capabilities as well as integrate them into their existing IT infrastructure. In fact, in Billing & Collections, it was found that traditional billing systems were not designed to handle the complex dynamics of billing for recurring revenue based solutions.
This situation was exacerbated where the offering in question was delivered electronically. Of those respondents surveyed, 67 percent cited the Internet as the preferred delivery method for recurring revenue based offerings, followed by physical shipment (31 percent), professional service (29 percent), cable/satellite/other network (16 percent), physical infrastructure (12 percent) and customer pick-up (12 percent).
Given that the Internet is the preferred delivery method and more than half (54 percent) of companies active in electronic delivery offerings are in the investigation, formulation and implementation stages and that companies prefer recurring revenue based pricing (46 percent), the report findings suggest that the move to recurring revenue based offerings will continue. Survey respondents cited revenue predictability and customer preference as the key driving factors contributing to this trend. Additionally, as technology continues to evolve, companies will be able to “buy” versus “build” which will reduce time and cost to market—an ability that will further accelerate the trend toward recurring revenue based offerings.
“Our research findings support what we’re seeing in the market with companies of all sizes either initiating new, or augmenting existing recurring revenue based offerings in their portfolios,” said Tom Dibble, president and CEO, Aria Systems. “For companies who are either at or near the implementation stage, they need to spend time exploring how best to define their offering in addition to focusing on key elements such as application integration, content management and billing and collections. And for those companies who are not yet providing or considering offerings that generate recurring revenue, they need to consider doing so or risk getting left behind.”
Questions and results from Aria Systems’ “The Anatomy of a Recurring Revenue Business” report are available online at http://bit.ly/AriaIncytePR.
The study was conducted online within the United States on behalf Aria Systems and represents feedback from 1,000 qualified respondents across major industry sectors during the second half of 2011.
Aria Systems is the leading provider of cloud billing and subscription management solutions for Global 2000 companies. The Aria Subscription Billing Platform is the industry’s only advanced subscription billing solution capable of managing the entire subscriber lifecycle for all recurring revenue models as a company grows and expands its business. Disney, Pitney Bowes, Ingersoll Rand, DreamWorks, EMC, Internap, VMware, Taleo, and Hootsuite all rely on Aria Systems for fast time-to-market, low operational costs, and monetization flexibility.
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