The Agile Billing Market Is Evolving Rapidly

Welcome to The Margin, a newsletter designed to keep you on the leading edge of monetization.

In business, the difference between being ahead of the curve or slow to adapt is anything but marginal. The Margin aims to be the most useful, timely, and incisive ping that hits your inbox all week. It includes critical research and analyst insights to inform short and long-term decision making.

Here’s what you need to know:

Research spotlight | Last week, MGI published the Agile Billing Top 50 – a comprehensive buyer’s guide to the agile billing market.

The report features quantitative MGI 360 Ratings™ of 35 top billing vendors + 15 additional “honorable mention” suppliers.
It explores billing decision strategies, solution sourcing recommendations, success and failure in billing, key functional requirements, and more.
In connection with the Agile Billing Top 50, we also published new MGI Use Case Notes™ that describe the ideal user for each of the 35 top billing vendors.

A Story You Can’t Afford to Miss | The agile billing market is evolving rapidly.

The Agile Billing Top 50 cuts through the hype about trendy capabilities (such as usage/consumption billing), and instead offers straightforward building blocks for billing success.

A few key takeaways for potential billing buyers include:

The benefits offered by the MGI Top 50 suppliers far outweigh the risks.
Pricing and licensing models for billing software solutions vary and are in flux – most people have an outdated view of how billing products are priced today.
Users making strategic decisions should align themselves with suppliers taking the long view. Billing relationships tend to be measured in decades.
Vendor size is not an absolute indicator of product success – or ultimate project success. More than one mega-vendor is among the bottom in product, strategy, and management.
Successful projects start with supplier evaluations based on well-defined requirements. It’s time to retire the lengthy RFP – business demands are too high, and life is too short.
A healthy supplier relationship is vital. Buyers need their suppliers to succeed.

On the Horizon | Next week, we will publish separate reports featuring charts from the Agile Billing Top 50.

These charts plot billing suppliers’ Agility vs. Complexity, Complexity vs. Volume, and Volume vs. Agility – plus additional detail not available in the full report.

It will divide the billing market into four segments – HyperScale, Enterprise, MidMarket, and SmallBiz – and plot the suppliers that fall into each of these market segments against one another.
The aim is to identify the suppliers that compete for similar users and compare like with like.

Now let’s dive a bit deeper.

Research Spotlight

A dark blue background with the Buyers Guide text

The Agile Billing Top 50

The Agile Billing Top 50 is here! After months of vendor evaluations, briefings, product demos, reference checks, and research, MGI has published a comprehensive buyer’s guide to the agile billing market.

The report provides MGI 360 Ratings™ for 35 top billing vendors: Amdocs, Aptitude Software, BillingPlatform, Binary Stream, BluLogix, Certinia (formerly FinancialForce), Chargebee, ChargeOver, Cleeng, CSG, Evergent, Good Sign Solutions, Gotransverse, JustOn, LogiSense, Maxio, Monetize360, Nitrobox, OneBill, Opencell, Oracle, Oracle NetSuite, Recurly, RecVue, Rev.io, Sage Intacct, Salesforce, SAP, Stax Bill, Stripe, Vindicia, Workday, Zoho, Zone & Co., and Zuora.
It also details 15 honorable mention suppliers who are under coverage but not rated: Amberflo, Billwerk, Cerillion, IDI Billing, m3ter, Metronome, MonetizeNow, Netcracker, Octane, Orb, Ordway Labs, Paddle, Piano.io, Subskribe, and Wingback.

The report describes factors that drive the business case for agile billing, emerging requirements, agile billing’s role in the Agile Monetization Platform (AMP), strategic priorities in terms of investment, human capital, supplier partnerships, and business strategy, best practices for evaluating, adopting, and implementing agile billing, and more.

It also includes new MGI MarketLens™ charts that plot billing suppliers’ solution strength against their go-to-market strength, agility vs. complexity, complexity vs. volume, and volume vs. agility.

Each of the 35 MGI 360 Rated™ billing vendors also have a new MGI Use Case Note™ available separately.

The Use Case Note describes the ideal user of a given solution in terms of its target company size, geographic regions, business models, tech ecosystems, sales channels, primary verticals, and more.

A Story You Can't Afford to Miss

A book open with a magnifying glass in the center

Key Takeaways for Potential Billing Buyers

The Agile Billing Top 50 features insights about the billing market and advice for the buyers, sellers, and investors who populate it. Here are just a few key takeaways for those attempting to navigate the market:

Faster implementation times, greater flexibility for the business, and (often) a superior fit are among the major benefits of the newest generation of billing suppliers. Whereas it used to take months or years to build or implement a billing system, today’s solutions can go live in months or even a few short weeks.
Going with a mega-vendor does not guarantee a positive business outcome. Several of the larger vendors have reduced their R&D investments and are followers, not visionaries, when it comes to introducing new monetization capabilities. In the Product scoring, mega vendors like Amdocs, Oracle NetSuite, Salesforce, and Stripe were among the bottom ten.
Companies backed by venture capital or private equity will all seek an exit, particularly those that received first funding (or were re-capitalized) seven or more years ago. A spike in vendor consolidation is likely.
Some suppliers offer traditional license and maintenance fee structures, while others charge per order, per API call (or some usage metric), and/or fees based on the revenues of the organization or the overall transaction volumes. Additional charges may include one-time setup fees, monthly minimum fees, and more. Users should not leave negotiation of license models and fees to the end of the selection process.
As the market matures, the notion of integrated subscription management – a holistic approach that allows a business user to completely manage the “subscription relationship” – will become an expected norm in monetization. A number of the B2C-focused vendors have this built into their solution.
“Next Gen” billers (quite a few are in the Honorable Mention section) are worth evaluating, if only to see what a modern take on monetization looks like. Many of these suppliers are integrating quoting, billing, and rev rec into a single solution.

More detail and insights are available in the full report.

On the Horizon

A graph with Solution Strength on the x-axis and Go-To-Market Strength on the y-axis

Labeled versions of the chart below will be published next week as part of the MGI MarketLens™ in Agile Billing. This report will plot billing suppliers’ Agility vs. Complexity, Complexity vs. Volume, and Volume vs. Agility.

It will drill into each of the four main market segments we identify – HyperScale, Enterprise, MidMarket, and SmallBiz.

Billing Agility describes the flexibility to quickly configure and test new pricing mechanisms and introduce changes as dictated by market conditions. We define billing agility in terms of business agility, IT agility, and product agility.
Billing Complexity comprises the complexity of factors such as the product, pricing mechanisms, channel organization, payment platforms, regulatory compliance, cross-border capabilities, business rate of change, and more.
Billing Volume is measured in terms of the typical number of invoices generated per month (not number of transactions).

Look out for the updated MGI MarketLens™ in Agile Billing report next week to get full definitions, detailed MarketLens charts by market segment, and more insights into the strengths and weaknesses of the 35 top agile billing suppliers.

In the meantime, check out the MarketLens™ reports for Automated Revenue Management (ARM):

MGI will host a webinar on Thursday, July 20 at 8am PT / 11am ET to discuss the Agile Billing Top 50 (plus accompanying Use Case Notes and MarketLens™ reports) in detail.