I seem to have created a bit of a niche for myself commenting on the cloud subscription and billing space. I’ve spent a lot of time over the last few years speaking with players Aria, Monexa, Vindicia and Zuora (disclosure – I have done consulting work for all four of those vendors) and have spent a lot of time thinking about the space. Recently at the Structure conference I spent some time with Curt Raffi from Metanga. Metanga is a division of MetraTech, an on-premise billing and subscription product. Perhaps sensing the shifting sands of the technology industry, MetraTech developed a SaaS subscription and billing product, Metanga.
Another thing I’ve been calling for from subscription and billing providers is a clearly defined differentiation between what they do and what other providers do. It seems to me that vendors are chasing their competitors tails and attempting to answer each new marketing message with a duplicate marketing message – that sort of follow-the-leader makes for a lack of focus and confusion in the marketplace. Metanga therefore has it’s own unique point of differentiation, they are the first billing and subscription provider natively on Azure –in fact Metanga’s parent company, MetraTech actually does all the billing for the Azure platform and Office365 via its product MetraNet. Raffi was quick to state that Metanga will still support other platforms but they’re especially focused on people using Azure and, more importantly, see this as a good potential source of customers.
Something I’ve been thinking about recently and which I’ve discussed with many in the space is that cloud subscription and billing vendors players are, in some ways, their own worse enemies. They tend to tell people to use their solutions for everything, without admitting that there are applications that fall outside of the ideal fit for their solutions. I strongly believe that Zuora, Aria, Vindicia and Metanga should all focus on use cases that truly work with their solutions – where there is a need, sufficient complexity to demand the flexibility they deliver and a revenue stream that warrants the expense of a third party subscription and billing provider. Raffi agreed that pooling everyone together doesn’t make sense – in his words, and for some situations where the breadth of these solutions is overkill the price can look “wacky”. But for more complex needs cloud subscription and billing is useful – and this is the particular area that these vendors should focus upon.
I was interested to hear Raffi’s thoughts around the “revenue ecosystem”. As he points out, in the cloud economy the customer has a dynamic relationship with providers. The billing system is the repository that understands that relationship – CRM, financial and other systems do not. Therefore the billing system is being called upon to do more things than simply billing – this will continue and providers will need to deliver more value for the charges they extract from companies. One example Raffi gave is that of bi-directional commerce where organizations buy services, mash them up in different ways and sell them on. This is a model that is very hard to service with an on-premise solution, and sufficiently complex to justify a third party solution.
In keeping with this theme Raffi contends that in the way that cloud CRM has changed the model around CRM, so too will cloud subscription and billing solutions deliver holistic “customer revenue lifecycle management” – that’s a key theme that vendors need to run with.
Video below – excuse the slightly patchy audio.