Conga’s New Line - Dispatch from Conga Connect, Orlando

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 a late adopter 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 | Is Software Still Eating the World?

In 2011, Marc Andreessen said software is eating the world. More than a decade later, is software full yet?

We recently assembled a bottom-up estimate of the software industry by aggregating revenues of all software companies globally.
With a projected CAGR of 11.17%, the simple answer is: not even close.

A story you can’t afford to miss | Conga’s New Line – Dispatch from Conga Connect, Orlando

It’s time to revisit Conga – it’s profitable, growing, and gaining customer confidence.
700 Conga customers, partners, and prospects gathered to share monetization (“revenue lifecycle”) experiences last week.
Inspired management announced the revenue lifecycle management cloud platform, a partnership with Accenture, and major accounts who are re-upping their investment in Conga.
Conga is finding its groove relative to Salesforce and competitors in the market for sophisticated CPQ and CLM use cases for mid-to-large global enterprises.

On the horizon | Sizing Up the Service Economy

Recent MGI Research notes forecast the size of technology and software – as well as the headwinds and tailwinds shaping these industries’ growth.
We have conducted bottom-up estimates of the services and professional services industries to match – coming soon.
In the meantime, get to know the service economy. Intoduction to Service-as-a-Business presents a reference model that rolls front-end solutions and back-office financial functions into a cohesive platform specifically for services.

Now let’s dive a bit deeper.

Research Spotlight

Is Software Still Eating the World?

Software breeds predictability – which is nothing to sneeze at, especially during economic tumult. Further, it permeates nearly every aspect of most organizations – that is to say, software purchasing extends far beyond the IT department. The headwinds and tailwinds shaping the software market – a nearly trillion-dollar industry with double-digit growth – should be on every executive’s radar.

Zoom out | MGI Research forecasts that the software industry will grow from $893 billion in 2022 to $1.36 trillion in 2026, representing a 5-year CAGR of 11.17%.

Software companies in the United States will dominate the industry, with their revenues more than double the combined revenues of all other software companies globally.

The intrigue | Growth in the software industry is being driven by both vertical and horizontal applications, lower-than-ever development costs, and tech’s new best friend, ChatGPT.

Geopolitical turbulence, labor shortages, and inflation threaten to stand in the way of growth.
But remember: behind every “digital transformation” is the substantial adoption of new software.

On the Horizon

We all know the value of a good product. Afterall, the tech market is bigger than you think, and software is still eating the world. As tech continues to embrace the XaaS business model, many providers are left wondering: what about the value of services?

In 2022, we estimated that services (including professional services and services organizations within product companies) represent more than $40 trillion. Soon, we will publish a research note summarizing our forecast for the services industry’s size and growth trajectory over the next 5 years.

Early Insights | We project the service economy will grow at a CAGR of 6.45% over the next five years. Meanwhile, professional services – a subset of the overall services industry – will grow nearly twice as fast.

In the meantime, learn about the Service-as-a-Business (SaaB) reference model, and find out if your organization is committing the 12 Deadly Sins of Managing a Services Business.

A Story You Can't Afford to Miss

A conference room with the text Connect 2023

Conga’s New Line – Dispatch From Conga Connect

After a period of tumult, Conga is getting its mojo back. If Conga were publicly listed, it would be one of nine application vendors with more than $450Mil in revenues, double-digit growth, and > 25% EBITDA. 2+ years into a transformation, the new-and-improved Conga is showing positive results and unexpected promise.

At a time when Salesforce is under investor scrutiny to improve profitability, and the future direction of Salesforce Revenue Cloud is uncertain, Accenture’s partnership with Conga is acknowledgment that complex enterprises need more than Salesforce CPQ currently delivers.
Accenture’s investment in Conga is based around several major accounts (namely Roche) using Conga as part of their monetization platform.
The conference was punctuated by case studies from Hitachi Energy, GE Healthcare, Twilio, Roche, and Moody’s – among others.
Growth is coming from installed base – net new name business is ramping more slowly. Conga has to demonstrate momentum beyond its base.
The Revenue Lifecyle Cloud (not unlike our own AMP model) is cloud-agnostic. Conga still supports Salesforce cloud and interface. However, by adding choice beyond Salesforce cloud, Conga will reduce the “Salesforce tax” it pays. For this and other reasons, Conga’s financial position will strengthen further.

Keep an eye on | Early adopters are just beginning to move to its new cloud – it’s a journey that will take time for customers and the company. Success is far from assured.