San Francisco, CA – February 26, 2014- One of most notable business trends over the past year has been the rush to recurring revenue models by companies that previously had never considered them as a significant growth opportunity. Aria Systems co-founder and the inventor of cloud billing, Brendan O’Brien, examines recent recurring revenue initiatives by brand-name companies like Adobe as well as the “Internet of Things” movement and its intersection with recurring revenue models in a recent interview with Mark van Rijmenam for Smart Data Collective.
O’Brien noted that many of today’s new business models could not have been predicted ten years ago. “The shift is starting to impact businesses that you would never dream would offer their products or services on a recurring basis,” says O’Brien, who serves as the Chief Architect of recurring revenue management innovator Aria Systems.
O’Brien told van Rijmenam that an increasing number of businesses across traditional industries are turning to recurring revenue, once primarily the domain of online movie and music providers, because of the advantages it brings to the table.
As an example of the trend, he points to Adobe Inc.’s recent decision to shift to online subscriptions for its suite of popular consumer software products in place of one-time sales of software in shrink-wrapped packages.
“They are at the vanguard of a huge trend,” says O’Brien. “It’s completely disruptive, and it’s changing every possible vertical industry.”
O’Brien explains that when he wrote the original software for Aria Systems more than a decade ago, he was merely trying to improve upon systems that were supporting existing subscription-based business models. He would have never predicted that the recurring revenue model would permeate multiple sectors of the business world, as it has started to do over the past year.
“It’s been amazing for us, and the biggest trend of the last year,” he says.
O’Brien also discussed the emergence of the much-discussed “Internet of Things,” which refers to the connecting of all kinds of ordinary devices directly to the Internet. O’Brien says it could turn out to be the next big disruptor for many industries.
O’Brien cites the example of a soda dispensing machine in a college dorm self-reporting its changing inventory of various brands through the Internet using subscription and consumption-based models. With the appropriate sensors and software, O’Brien, notes that the soda machine could alert the supplier when low on a particular soft drink, thereby helping maximize the sales and profit potential of the machine.
Not surprisingly, O’Brien is already thinking about the big challenge in applying today’s monetization strategies to the Internet of Things. For example, as more machines are connected to the Internet, subscribers to the various services will begin to want some sort of consolidation of the various billing processes.
“It’s going to become unwieldy for people to have so many subscriptions,” O’Brien observed. “It’s very attractive, but it’s a different story when I have seven subscriptions vs. forty-eight.”
However, O’Brien says this coalescing will be difficult. To benefit subscribers as well as providers, all of the bills will have to go through a central source, while the revenue must be allocated back to the original vendors.
Yet O’Brien predicts that industrious companies will overcome this challenge as new self-reporting information systems will provide a big enough carrot, creating new business models while improving the processes involved and lowering costs at the same time.
Want to learn how businesses can develop a recurring revenue strategy that drives repeated sales and rapidly expands their markets by looking at the customer experience in a new way? Consider downloading the recently released ePaper “Why Recurring Revenue Success Is All About Customer Relationships.”
Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue business and deliver exceptional experiences to their customers. Learn more about us at www.ariasystems.com.
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