The Behind-the-Scenes’ Adventure in Discovering Recurring Revenue Innovators

I didn’t know compiling this three-part Recurring Revenue Innovators e-book would be such an adventure. It was fun to discover just how many companies across so many industries are adopting recurring revenue models. Not only has dubbed subscriptions “the e-commerce trend to watch in 2014,” it has averaged at least one subscription story per week since December.

Recurring Revenue Innovators (Part 1)  Learn How these Global Giants achieved Big Payoffs with Creative Recurring Revenue Strategies Recurring revenue refers, of course, to subscriptions but there are myriad of other models as well, including usage-based models (pay-as-you-go, a la Amazon Web Services), subscription plus usage combinations (such as your utility bills), freemium (where Box, Issuu and Pandora reign), multi-tier and the list goes on.

I recall the moment when it became clear that these recurring revenue innovations had gone mainstream. Visiting Philadelphia after Christmas, a guy in the coat check line at the Barnes Foundation Museum was raving about this cool subscription service for treats and toys for his dog Ruff. I came to learn that Barkbox was not a boutique outfit but that they already have 3 million unique visitors/month. (Bow) Wow!

Beyond our old-world subscriptions (newspapers, magazines, utilities, mobile phones), my family has a limited array of online subscriptions. Although we have yet to stream movies and still think of ourselves as living in the dinosaur DVD era, Netflix is at the top of our list for receiving movies in the mail. However, as far as backing up our computers we are in the 21st century having used our Mozy subscription for years. So like many, we’re getting there.

For example, upon the birth of my latest grandchild, we gave our son’s family a subscription to Blue Apron for Christmas. Like most good things regarding food in our family, my wife discovered Blue Apron, which delivers dinner ingredients (carefully measured) and recipes to cook them from.

Jim, my single friend of many years, has Gobble, a hyper-local (so far only available in the the Bay Area) provider of prepared meals for $10 per person. The one I ate was delicious, worthy of a service that calls itself “the dinner fairy.“

Lest I sound a little like a subscription newbie, I’ve done a considerable amount of research and writing on Software as a Service (SaaS), Infrastructure as a Service (IaaS) and freemium, all forms of recurring revenue, focused on enterprise software companies. While SaaS and IaaS have gone fairly mainstream, freemium has not. Perhaps symbolic, a freemium Meet-Up in the Bay Area, where I spoke in 2012, evolved into a SaaS Monetization Meet-up.

My latest foray is the Recurring Revenue Innovators e-book. In the Global Giants Edition, which debuted here this week and features companies like Toyota, Sony, Apple and more. I was fascinated by the unlikely subscription services from industrial heavyweights like Ingersoll Rand and Philips. Ingersoll Rand has brilliantly leveraged its Schlage lock brand into the Nexia smart-home subscription service for managing your home systems (locks, doors, heating/cooling, etc.) remotely. Ingersoll Rand’s Nexia Home brand is already a monetization model for the “Internet of Things” (See Aria co-founder Brendan O’Brien’s recent blog).

Philips offers a package of stay-at-home services for seniors, sold through senior housing chains, so they can tap new revenue from seniors who prefer to “age in place.” The idea is to help keep seniors in their homes as long as possible and something I will appreciate in a few years. Philips has sold the services on its own for some time, so going through housing providers is a channel play.

The underlying message of the Recurring Revenue Innovators e-book is that you can build a recurring revenue business model around almost anything under the sun. A creative approach to your customers consuming your goods and services on a recurring basis can build a considerable revenue stream for your business. Recurring revenue can be the underpinning of a very big business—think Netflix, Adobe, Google, ESPN, etc. Stay tuned, we have the Emerging Leaders and Revolutionaries editions on their way. And they’re quite interesting if I do say so myself. Enjoy.

-Tim Clark, FactPoint Group consultant and author of Recurring Revenue Innovators


About the Author

Tim Clark
Tim Clark is a partner and senior analyst with The FactPoint Group, a Silicon Valley-based market research and consulting firm that conducts proprietary research for customers and creates strategic content for clients. Its methodology relies on in-depth interviews with early adopters in target markets. Clark’s recent research has spanned Freemium, payments, Big Data, storage and Software as a Service. Prior to FactPoint, Clark was a senior analyst at Internet research firm Jupiter Media Metrix. Before becoming an analyst, Clark was a reporter and editor for 24 years, working as enterprise software reporter and e-commerce columnist for CNET's, Inter@ctive Week and Advertising Age.

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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