2017 was a dynamic year for the billing market. The space increased visibility as the back office solution to drive revenue from increasingly hot (and pervasive) recurring revenue business models. A harbinger of continued category momentum, research on billing vendors was published by two analyst firms, Forrester and IDC: The Forrester Wave™: Recurring Customer and Billing Management, Q3 2017 reports and IDC MarketScape: Worldwide Subscription Relationship Management (SRM) 2017 Vendor Assessment respectively.
Looking ahead to 2018, the billing category is poised for continued growth and change. Winners will be those that can quickly and effectively respond to evolving market dynamics. Here are five trends to look out for:
- Cloud services march continues: According to the latest data from research firm IDC, the public cloud services market grew 28.6 percent in the first half of 2017, with revenues totaling $63.2 billion. Louis Columbus piles on in Forbes noting that “74% of tech CFO’s say that cloud computing will have the most measurable impact on their business in 2017.” Accordingly, look for the Cloud to play a more important, strategic role for enterprises. IDC SaaS Analyst Eric Newmark notes, “Many companies have picked the low-hanging fruit, in terms of apps that could be easily moved to the cloud, and are now evaluating the migration of their next set of larger strategic systems (i.e. ERP, supply chain applications, etc.) to a SaaS model… These projects, coupled with companies’ efforts to embrace digital transformation, will continue to fuel strong SaaS growth.”
- Buyers demand better payment options: In 2017 Millennials asserted themselves on the consumer stage, spending more than $200 billion. Recent research from Adroit Digital details the drivers behind their spending: price point had the most influence on a Millennial’s spending (62%), outweighing recommendations from a friend (55%), brand reputation (47%), and product quality (35%). Driven by Millennial expectations along with increased selection and low switching costs, buyers will demand better and more customized payment options that suit their lifestyle and pocket book.
- Billing complexity increases: There are new regulations in Europe, companies like Amazon now offer per second pricing, and IoT continues to play a role in developing new and predictable revenue streams in industries like medical and automotive — all of which makes offers and transactions more intricate. Consumers will still demand simplicity and ease of use; businesses will want exact pricing. Billing models will stretch to satisfy both B2C and B2B expectations.
- Billing becomes a competitive differentiator: Because buyers will demand choice and flexibility; sellers will increasingly deliver varied payment models and plans as the way to differentiate their offerings. Successful companies will retain customers over longer periods of time and increase profitability. As such, the CIO and CFO will enjoy more responsibility and power as their offices become revenue generating.
- Cloud billing revenues jump: All of this leads to a leap in demand for cloud billing solutions that can quickly and efficiently enable complex billing schemes at global enterprises. As an indicator, Research and Markets projects that the Global Telecom Cloud Billing market is poised to grow at a CAGR of around 27.9% over the next decade to reach approximately $22.84 billion by 2025. Expect that to trend across verticals.
Whatever your goals are in the new year, there is no time like the present to design a path toward success. For many enterprises that will include upgrading their back end systems to keep pace with new market demands and opportunities.