webinar: winning pricing strategies for software, iot and ...€¦ · winning pricing strategies...
TRANSCRIPT
WEBINAR: Winning Pricing Strategies
for Software, IoT and Digital Goods
April 9, 2015
Housekeeping Rules
1. All lines are on mute
2. Use the Questions Box during the session. Don’t Wait!
3. Questions will be answered during the webinar session
4. Unanswered questions and parking lot items will be followed up after the webinar
5. This presentation is being recorded for later playback and sharing
6. Feedback forms will be provided at the end of session
7. Remember to tweet with #Pricing
Speakers
Amy Konary Research Vice President IDC @mizkonary
Omkar Munipalle Director, Cloud Strategy and Business Development Gemalto (formerly SafeNet) @Omunipalle
Raj Badarinath Vice President, Product Marketing & Alliances Avangate @rajmatazz
Acquired by Francisco Partners in 2013
Avangate Quickfacts Over 4,000 Customers
50% Annual Growth
Global Team of 230+
Established in 2006
Focus on Software and XaaS
Bay Area Headquartered
Powering Modern Digital Commerce.
Digital Businesses Are Evolving Monetization, Business Model, Go-to-market
Transitioning to New
Revenue Models
Managing the
Commerce Lifecycle
Value is in software, not
the device
Software
Services
Internet of Things (IoT)
Old eCommerce approach
Online is a channel
Drive transactions
One-time sale
International over time
Product separated from commerce
Acquisition only
Single pricing model, static
Digital Business today and tomorrow
“Digital” is the business
Build customer relationships
Expand usage and drive continuous monetization
Global from the start
Go-to-market embedded in product
Acquire, activate, renew, upsell
Multiplicity of models, iterative
Yesterday v/s Tomorrow
Maximizing Recurring Revenue
Amy Konary
Research Vice President
April 2015
Key Dynamics
Subscription
Subscription35%
of total WW
software
revenues by 2018*
Mobility
More cellular
connections
than people by
2015 (source: Ericsson)
Cloud$1 of every $5
spent on
software
consumed via
the cloud by 2018
Excluding maintenance
Source: IDC, 2014
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 3
Transformation
Usage-based
pricing grows
34% in next 18-
24m
Subscription business models are transforming every industry
What are we trying to enable?
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 5
1. Align price with experience
Product/Service
Defined by access
Consumption
Defined by interaction
Outcome
Created through interaction
Software Pricing- 2015
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 6
Perpetual License Fees (65%) Subscription (35%)
WW Software License Revenues $276B
3% CAGR 14% CAGR
Sim
plic
ity
Fle
xib
ility
Pricing Models
Access Consumption
Source: IDC Subscription Forecast, 2014
Access
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Pros
Predictable/easy to forecast
Scales up and down
Familiarity
Low-hanging fruit
Easy compliance
Cons
Price/value not always aligned
Apps vs. infrastructure
Low vs. high usage
Not all access is =
Increase # user types
Increase complexity
Metering access is not the same
as metering consumption
Metering access is not the same as metering
consumption
Metering Access
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 8
Consumption
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 9
Pros
Efficient way to buy
Scales up and down
Supports incremental adoption, or
experimentation
There will likely be a role for access
models even when consumption is
involved.
Cons
Metrics not always obvious
Hard to predict
Not as familiar
Hierarchy of Pricing Flexibility
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 10
Subscription
Metered
Access
Consumption
Outcome
What is a
successful
outcome?
Size= cost
of
equivalent
unit
Challenge
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 11
“…messy organic growth, seven customer data stores,
three independent payment collection systems,
customers passed between different contact centers, no
centralized view of the customer.”
“how do we enhance and maintain our customer
experience while changing every fundamental aspect of the
technology that supports our subscription business without
damaging our customer experience?”
Best Practices
Flexibility
Complexity
Simplicity
Rigidity
We meet
whatever needs
our customers
desire
We need to
make it
simpler
We decided to
go “all in”
We realized a
one-size fits
all approach
doesn’t work
SY
ST
EM
S
Total Solution for Digital Business
Gemalto quickfacts
Sentinel Product Family: Trusted by more than 10K customers
CRM Marketing
Automation eCommerce/ In App
purchase Billing Payments
Digital Business Architecture
Security
Digital Product / Service
Usage
Information Entitlements Package Setup
Cu
sto
mer
In
tera
ctio
n
Mo
net
izat
ion
Co
mm
erce
Online / Direct Channels Indirect Channels
Flow
Product Catalog
Orders & Payments
Billing and Invoicing
Post-paid Payments
Package Setup
Provision Entitlements
Usage Monitoring
Software
Provider of analytics for
large enterprises
Seamless and automated
quote-to-cash process
Support subscriptions and
recurring revenues
Enable upsell throughout
the commerce lifecycle
Sample Customer Use Cases
Online Service
Provider of online legal
services
Full commerce life cycle –
online customer Acquisition
Enable a segmented
market offering – Product
packages
Authorized access to
entitled assets
Low friction renewals
IoT
Medical Devices
generating revenue through
S/W
Employ pay per use model
to enable and track different
feature utilization
Automated invoicing and
billing
Capture incremental
revenue through upsell
Amy Konary, IDC @mizkonary
Raj Badarinath, Avangate @rajmatazz
Omkar Munipalle, Gemalto @Gemalto
Questions?
#Pricing
Avangate B.V. Amsterdam, The Netherlands Tel: +31 20 890 8080
Avangate Inc. Redwood Shores CA., USA Tel: (650) 249 - 5280
[email protected] www.avangate.com
Thank You.