I’ve spent a couple of years closely following the subscription and billing space – particularly the SaaS startups that are hoping to be the face of the next generation of technology. Historically of course, billing has been dominated by two particular approaches. The first is home baked solutions that large enterprises have created for their own particular needs. The second approach is large third party billing and subscription solutions form the likes of SAP, Oracle, Amdocs and the like.
Into this busy space have come the startups – hoping to bring high level billing and subscription services to new industries, new verticals and traditional customers who are demanding reduced costs, higher degrees of flexibility and more agility. Companies like Aria Systems, Metanga, Vindicia and Zuora are hoping to change the subscription industry.
These vendors re enjoying remarkable success but until now we’d not seen good case studies that showed larger customers moving from traditional billing products to SaaS. During a recent trip to San Francisco, I took the opportunity to have breakfast with Jim Alexander, Senior Director of Product Management at Aria. Alexander joined Aria after years of traditional billing experience at Amdocs so it as an interesting dive into the murky industry that is billing.
By way of illustration of the point of SaaS billing, Alexander told me about a recent win that Aria has enjoyed, that of the billing services for a residential triple play (voice services, broadband and TV) being offered by the Danish Telco, Tele-Danmark. The YouSee offering packages together discrete services but has fairly flexible and dynamic pricing and packaging approaches – they were using their own home-bakes billing package but wanted a solution that they could adapt rapidly to meet their needs. YouSee is also not a small startup – they have over 50% of all households in Denmark – and as such are a larger company than would usually be in the pipeline of any of the SaaS startups.
The interesting thing here for me is that YouSee chose Aria instead of adapting their own product that they’d already sunk significant costs into, on top of this, TeleDanmark is a large customer of a traditional billing provider, but decided to walk away from that relationship to use Aria. Similarly, and in something of a blow to the traditional enterprise customers like Oracle and SAP, one of the deciding factors was that YouSee demanded a billing system that integrates tightly with other applications across the company – a SaaS solution with it’s open and extensible API approach answered that need.
Seeing these companies move up the food chain, in spite of strong responses from traditional vendors, is a validation of the SaaS approach – expect to see many more success stories like this one in the months to come.
Disclosure – Zuora, Aria and Vindicia sponsored a Diversity Analysis whitepaper