WEBINAR: Winning Pricing Strategies for Software, IoT and Digital Goods. April 9, 2015

Transcription

1 WEBINAR: Winning Pricing Strategies for Software, IoT and Digital Goods April 9, 2015

2 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

3 Speakers Amy Konary Research Vice President Omkar Munipalle Director, Cloud Strategy and Business Development Gemalto (formerly Raj Badarinath Vice President, Product Marketing & Alliances

4 Avangate Quickfacts Over 4,000 Customers Established in 2006 Focus on Software and XaaS 50% Annual Growth Bay Area Headquartered Acquired by Francisco Partners in 2013 Global Team of 230+ Powering Modern Digital Commerce.

5 Digital Businesses Are Evolving Monetization, Business Model, Go-to-market Software Transitioning to New Revenue Models Services Managing the Commerce Lifecycle Internet of Things (IoT) Value is in software, not the device

6 Yesterday v/s Tomorrow Old ecommerce approach Digital Business today and tomorrow Online is a channel Drive transactions One-time sale International over time Product separated from commerce Acquisition only Single pricing model, static 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

7 Maximizing Recurring Revenue Amy Konary Research Vice President April 2015

8 Key Dynamics Cloud $1 of every $5 spent on software consumed via the cloud by 2018 Subscription Subscription35% of total WW software revenues by 2018* Mobility More cellular connections than people by 2015 (source: Ericsson) Transformation Usage-based pricing grows 34% in next 18-24m Subscription business models are transforming every industry Excluding maintenance Source: IDC, 2014 IDC Visit us at IDC.com and follow us on 3

9 What are we trying to enable? 1. Align price with experience Product/Service Consumption Outcome Defined by access Defined by interaction Created through interaction IDC Visit us at IDC.com and follow us on 5

10 Software Pricing WW Software License Revenues $276B Perpetual License Fees (65%) Subscription (35%) 3% CAGR 14% CAGR Simplicity Access Pricing Models Consumption Flexibility Source: IDC Subscription Forecast, 2014 IDC Visit us at IDC.com and follow us on 6

11 Access 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 IDC Visit us at IDC.com and follow us on 7

12 Metering Access IDC Visit us at IDC.com and follow us on 8

13 Consumption 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 IDC Visit us at IDC.com and follow us on 9

14 Hierarchy of Pricing Flexibility Outcome Metered Access Consumption What is a successful outcome? Subscription Size= cost of equivalent unit IDC Visit us at IDC.com and follow us on 10

15 Challenge 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? IDC Visit us at IDC.com and follow us on 11

16 SYSTEMS Best Practices Flexibility We meet whatever needs our customers desire We realized a one-size fits all approach doesn t work Rigidity Complexity We need to make it simpler Simplicity We decided to go all in

17 Total Solution for Digital Business

18 Gemalto quickfacts Sentinel Product Family: Trusted by more than 10K customers

19 Monetization Customer Interaction Digital Business Architecture CRM Marketing Automation ecommerce/ In App purchase Billing Payments Commerce Package Setup Entitlements Usage Information Security Digital Product / Service

20 Flow Online / Direct Channels Indirect Channels Product Catalog Package Setup Orders & Payments Provision Entitlements Billing and Invoicing Usage Monitoring Post-paid Payments

21 Sample Customer Use Cases Software Online Service IoT Provider of analytics for large enterprises Seamless and automated quote-to-cash process Support subscriptions and recurring revenues Enable upsell throughout the commerce lifecycle 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 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

22 Questions? Amy Konary, Omkar Munipalle, #Pricing Raj Badarinath,

23 Thank You. Avangate Inc. Redwood Shores CA., USA Tel: (650) Avangate B.V. Amsterdam, The Netherlands Tel: