Layoffpocalypse?

Agility, Complexity, Volume

Zoom out | MGI MarketLens™ reports plot a select group of suppliers by two key pairs of coordinates: Agility vs. Complexity or Complexity vs. Volume.

• These research notes allow buyers to sift through the noise in the crowded agile billing market and zero in on a few suppliers that fit their specific needs.
• They also provide qualitative and quantitative definitions for agility, complexity, and volume.

The intrigue | Even in as crowded a market as agile billing, no two vendors are the same. Our 360 Ratings™ evaluate billing vendors’ performance relative to the rest of the market.

• Our Use Case Notes™ define their ICPs. And
• MarketLens reports hone in on the specifics: the number of transactions a solution can handle, what type of transactions they process, and the speed at which they transact.
• Together, these three categories of MGI research notes provide a comprehensive and granular view of the agile billing market.

The agile billing market has matured significantly in the past five years. While billing was once viewed as a painful back-office necessity, it has evolved into more of a secret weapon – a strategic differentiator whose effects on revenues and profitability are certainly felt, even when they are not seen.

Usage, consumption, and other creative business models can provide pathways to engage with new customers without the friction of upfront costs. We are conducting a survey of business leaders to illuminate how companies plan for and adopt new billing and pricing models.

The results of this survey will be incorporated into a research note analyzing the state of usage billing today, the adoption of key trends (such as post-paid consumption and recurring models), and the primary obstacles billing vendors will grapple with in 2023 and beyond.

Please take 10 minutes to fill out the survey, and you will receive a copy of the results.

Layoffocalypse?

Does the recent spat of mass layoffs mean the tech industry will nosedive in 2023? Or is it an unfortunate but necessary lifeboat to help keep tech companies afloat during uncertain economic conditions? Zuckerberg did call 2023 the “year of efficiency,” after all.

• US tech headcount has dropped by 6% since the start of 2022. That may seem like a lot – but small beer when compared with the dotcom era’s 23% drop.
• Sales, marketing, and HR workers are potentially at risk. But is it really so bad in the rest of the tech sector?
• Just as FAAMG stocks made up a disproportionate share of NASDAQ total market capitalization, these same companies “over represent” when it comes to total job reductions. When Microsoft cuts 10,000 jobs, that number looks big – but it’s still just 5% of a very large workforce. Arguably, MSFT should be trimming the bottom 5% every year.
• A number of these companies were operating with unnecessary bloat. Salesforce has attracted attention from activist shareholders for precisely this reason (among others).
• Many tech employee benefit packages included unnecessarily generous perks. They should have been leaner to begin with. And the headline names – Meta and Google in particular – never focused on profitability. Ever.
• There is a significant disconnect between what Meta and Google employees (among others) were being paid, and what the market will pay today. This expectation gap mirrors the chasm between private companies’ valuations last year and what investors and acquirers are willing to pay for them today. The market has yet to balance – FAAMG workers will find it hard to get equivalent comp packages.
• We have yet to see the real bloodletting beyond FAAMG. Privately held, venture-backed Series C-F companies who have not grown into their inflated valuations will have to find a realistic path to profitability. Many will be forced to cut costs significantly deeper than the token 3-5% reductions announced so far.

The sunny side for tech workers:

• As software becomes increasingly embedded in every economic vertical, tech jobs remain in high demand in other industries. The “war on talent” is a result of
  • an aging workforce
  • long-term demographic trend, and
  • an undersupply of graduates prepared for the software-driven digital economy.
• Tech workers with AI/ML experience can exhale – with generative AI’s growing popularity, companies are looking to expand in this area.
• Keep in mind that growth in the tech industry still far outpaces global GDP.