We have updated the MGI Forecast of the total addressable market (TAM) for Agile Monetization Platform (AMP) software from 2018 to 2022.
This latest forecast contains worldwide annual estimates of spending on software that falls into AMP categories including Financials, Billing, Revenue Recognition, CPQ, CRM, Order Management, Contract Lifecycle Management (CLM), e-Commerce, and Mediation. The report also details growth rate, breakdowns by AMP categories, geographies, economic sectors, analysis of market size based on company size, the impact of Internet of Things (IoT), Digital Transformation, and company growth and technology spend profiles (among other factors). The scope of the data has been expanded to include estimates and annual forecasts for cloud-based AMP software as well as the corresponding legacy on-premise software solutions. This MGI Forecast examines the total potential spend in each category and across AMP as a whole.
The term Agile Monetization was introduced by MGI Research in 2015 and originally evolved from a concept of Agile Billing pioneered by MGI Research in late 2013. In the monetization context, agility refers to the ability to create and evolve new offers by iterating rapidly, thus accelerating the velocity with which a business can bring new product offers to market.
The very nature of competition today is changing radically. Product innovation and growth opportunities are bound only by the imagination. Once-protected pools of profit are now at risk. Product cycles and market opportunities come and go in less than five years with the majority of benefits accruing for a limited few. Organizations of all sizes want greater transparency and control in their business relationships. The demand for custom pricing models and flexible terms is counterbalanced by the challenges of delivering these capabilities at scale.
Across most key world economies, the number and complexity of regulatory and audit requirements are mounting while the timeframes in which to reach compliance are getting shorter. Against this rapidly accelerating backdrop, product innovation and revenue optimization are the crucial levers for growth and profitability. In the face of these opportunities and threats, progressive organizations are focusing on key processes and new monetization tools to sharpen their edge.
Increasing regulation, digital disruption, activist investors, and ever-evolving customer demands are overwhelming legacy IT systems and processes. Individuals and businesses alike are looking beyond product purchasing to the consumption of services. Customer preferences for pricing models, payment modalities, and personalized quotes and contract terms continue to shift. Subscriptions, demand-based price models, pay-per-use, and increasingly complex enterprise agreements with a litany of unique entitlements are now the norm. Technology disruption accelerates the demand for these new pricing models, and it is everywhere–from the Internet of Things (“IoT”), autonomous vehicles, and artificial intelligence to digital disrupters like Netflix, Airbnb, and Uber. This revolution necessitates a reckoning for businesses from corner stores to Fortune 10 companies.
Reacting to these new business needs, organizations are looking to revamp their core business systems, particularly in the area of monetization.
Monetization as a Strategic Capability
Monetization is a measure of how efficiently and effectively market demand is created and translated into revenue, profits, and competitive differentiation.
The process of monetization reaches across the entire organization covering product development, marketing, sales, finance, billing, and customer support—literally from the back office to the front office and into the customer and supplier ecosystem. Monetization is not a single product but a business discipline that combines business processes, tools, and skilled human resources to efficiently and effectively create and translate market demand into revenues, profits, and competitive differentiation.
There are multiple business and technology drivers for investment in AMP solutions. AMP is one of those all-season markets with solid demand through good times and bad times. In periods of economic expansion, AMP enables companies to launch products faster and accelerate time to revenue while increasing customer success and satisfaction. In periods of relative economic weakness, AMP is no longer a boost but an essential business tool accelerating the order to cash cycle, reducing DSO, and enabling more granular (and efficient) product offer management.
In our research and advisory practice, we have seen clear evidence of companies prioritizing investment into AMP over other, more traditional business applications areas.
The market for Agile Monetization Platform (AMP) software represents a new, large (and expanding), all-season opportunity with a total addressable market (TAM) exceeding $172 billion from 2018 to 2022. MGI Research expects AMP spending to rise from $19 billion in 2018 to over $55 billion in 2022. The key drivers of growth include the shift to new business models based on recurring and/or usage-based pricing, increased impact from adoption of Internet of Things (IoT), regulation, the ability of vendors to reach previously unserved buyers, and the push to automate (“digitally transform”) the enterprise. The economics and agility of cloud computing solutions are also stimulating migration of workloads from traditional on-premise software solutions to cloud-based AMP options.
Leading organizations primarily in North America are already making the move to AMP today, and they comprise the bulk of the spending currently underway. Over the next 24 months, geographic markets beyond North America will accelerate, and fast-following firms and middle of the road organizations in North America will ramp up spending on AMP. Given the critical nature of AMP–it affects topline growth, profitability, and customer satisfaction–it is one area of technology spend that is being prioritized. This report analyzes the key market drivers and dynamics that are fueling the growth in AMP investments and details the geographies, sectors, and vertical industries that are most impacted by major trends like IoT (“Internet of Things”) and the adoption of subscription business models.
TABLE OF CONTENTS
- Executive Summary
- Key Business and Technology Drivers
- Regulatory Compliance
- Stepping Into the Future–Automation, Renovation, and Transformation
- Customers of All Sizes
- Top Symptoms of Need for Agile Monetization
- Key Elements of an Agile Monetization Platform (AMP)
- Who Are the Buyers of AMP
- Who Within an Organization Benefits From AMP?
- Functional Overlap
- Forecast Scope, Assumptions and Methodology
- AMP Total Addressable Market (TAM)
- Legacy Total Addressable Market
- AMP Annual Forecast
- AMP TAM Geographic Segments
- Top 10 Countries for AMP TAM
- AMP TAM Top Sectors
- Impact of Growth
- Impact of Technology Adoption Style
- Impact of Digital Transformation
- Impact of The Internet of Things (IoT)
- Impact of a Shift Towards Subscription Business Models
- Agile Billing Market Forecast
- Cloud Contract Management Market Forecast
- Cloud CPQ Market Forecast
- Cloud e-Commerce Software Tools Market Forecast
- Cloud Financials Market Forecast
- Cloud Order Management Software Market Forecast
- Cloud Revenue Recognition Software Market Forecast
- Cloud Customer Service Software Market Forecast
- Appendix: AMP TAM Forecast Assumptions and Stats
LIST OF FIGURES
Figure 1 – Current Business Environment
Figure 2 – Business Model Gap
Figure 3 – Symptoms of Need for Agile Monetization
Figure 4 – Rethinking Enterprise Systems
Figure 5 – Select AMP Elements
Figure 6 – AMP Benefits
Figure 7 – AMP TAM Forecast Breadth
Figure 8 – AMP TAM Forecast Depth
Figure 9 – Forecast Core Assumptions
Figure 10 – AMP TAM
Figure 11 – Legacy Monetization Software TAM 2018-2022
Figure 12 – AMP Annual Forecast
Figure 13 – AMP Geographies
Figure 14 – AMP Categories & Regions
Figure 15 – AMP Key Countries
Figure 16 – Top 10 Countries for Legacy Monetization Spending
Figure 17 – AMP Key Sectors
Figure 18 – Top Segments Within Sectors and Company Sizes
Figure 19 – AMP by Company Size
Figure 20 – AMP TAM by Growth
Figure 21 – AMP TAM by Tech Adoption Style
Figure 22 – AMP TAM by Digital Transformation
Figure 23 – Characteristics of a Digital Enterprise
Figure 24 – AMP TAM by IoT Impact
Figure 25 – Impact of Subscriptions on AMP Spend
Figure 26- Agile Billing AMP TAM Forecast 2018-2022
Figure 27 – Cloud Mediation Software TAM Forecast 2018-2022
Figure 28 – Cloud Customer Service Software TAM Forecast 2018-2022
Figure 29 – AMP TAM Source Data: Sectors and Industries
Figure 30 – AMP TAM Source Data: Regions and Countries
Figure 32 – AMP TAM Source Data: Total Revenue
Figure 33 – AMP TAM Source Data: Average Revenue
Figure 34 – AMP TAM Source Data: Growth Distribution
Figure 35 – AMP TAM Source Data: Average Revenue Growth