Approaches to Subscription Billing Sponsored by Summary Results

Approaches to Subscription Billing Sponsored by Summary Results January 2019

Survey Summary Between August and October, 2018, Gatepoint Research invited selected executives to participate in a survey themed Approaches to Subscription Billing. Candidates were invited via email and 100 executives have participated to date. Management levels represented are predominantly senior decision makers: 6% hold the title CxO, 37% are VPs, 56% are Directors, and 1% are Managers. Survey participants represent firms from a wide variety of industries including business and consumer services, financial services, healthcare, media, manufacturing (primary and high tech), public administration, retail and wholesale trade, telecom services, and transportation. Responders work for firms with a wide range of revenue levels: 23% work in Fortune 1000 companies with revenues over 1.5 billion; 13% work in Large firms whose revenues are between 500 million and 1.5 billion; 11% work in Mid-Market firms with 250 million to 500 million in revenues; 53% work in Small companies with less than 250 million in revenues. January 2019 Summary 100% ofResults responders participated voluntarily; none were engaged using Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

Executive Overview As leading organizations make the shift to selling everything as-a-service, they are discovering that their legacy approach to billing is holding them back. Outdated systems built to bill one-time product purchases and services can’t keep pace with the scalability and increasing flexibility required for subscription and recurring billing. What are companies doing to modernize their billing platforms and lay the groundwork for success in monetizing new business models? This survey asks respondents to report: What type of billing system is currently in use, and do they have more than one? Are they troubled by the limitations of their current billing platform? What are the challenges they face? Can their billing system keep up with product innovation? Are they able to view lifecycle billing, subscription, discount and loyalty details realtime? What’s on their wish list of billing platform functionality? Are they considering an update to their billing platform? Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

How many billing systems do you operate and maintain? I'm not sure 12% More than five 10% One 43% Two to five 35% Nearly half of executives surveyed are juggling multiple billing systems, increasing the likelihood of both risk and cost while hampering the insights gained by a more unified customer view. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

What type of system do you use for billing? Choose all that apply. 60% 50% 52% 40% 30% 31% 27% 23% 20% 10% 0% ERP Dedicated commercial billing system Spreadsheet or other manual system Homegrown system 52% of respondents still rely on ERP-based billing, and nearly as many rely on spreadsheets, manual systems, and/or built their own system. Less than a third have invested in a dedicated commercial billing system. Limitations associated with these solutions are evident as those surveyed respond to the next question. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

What are some of the challenges of your billing platform and system(s)? It's built for transaction-based billing, x000d not subscription and recurring services 36% Too limiting to support x000d new product and offer ideas It is unable to support the entire life cycle 34% 24% Too slow to launch new services Our risk of revenue leakage x000d and/or non-compliance is high 23% 22% 0% 5% 10% 15% 20% 25% 30% 35% 40% Business leaders reveal their most common pain point is dealing with systems built for an ERP-based, productcentric world rather than a customer-centric subscription and recurring model. Also vexing: inflexibility in supporting new offers, little support throughout the life cycle, and risk of revenue leakage and non-compliance. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

Which of the following financial objectives is most important, relative to your monetization solution? Increasing predictability of operating expenses 47% Reducing professional service expenses Reducing operating expenses x000d in favor of capital expenses Reducing capital expenses x000d in favor of operating expenses 20% 18% 14% 0% 5% 10%15%20%25%30%35%40%45%50% Considering financial objectives in selecting a monetization solution, 47% of respondents primarily value predictability in their operating expenses. With that, they are looking to reduce professional services, and operating expenses in favor of capital expenses. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

What aspects of the customers' accounts can you view in real-time? To-date billing status 67% Pending transactions and renewals 45% Usage and balances 35% Discounts 31% Subscription changes Loyalty program status 22% 11% None of these 0% 16% 10% 20% 30% 40% 50% 60% 70% 80% Today’s real-time customers expect their service providers to have complete up-to-date information on all their activity. While most respondents can view current billing status, they lack the capabilities to view most other customer activity in real time. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

What do you wish your current billing platform could do? Real-time usage processing/balance management 42% Accommodate rating across any metric or combination x000d of metrics, e.g.,time, volume, transactions, events, etc. 37% Discount across different subscriptions, services, x000d bundles, and user groups Provide subscriber self-care tools Bill on first usage after a free trial period ends Manage loyalty programs automatically 34% 27% 23% 22% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Respondents demand capabilities that enable them to provide a superior customer experience and differentiate them from their competitors. Real-time balance management tops the wish list, followed by a number of flexible monetization features like rating on any metric, robust discounting, self-care, free trials, and loyalty points. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

When do you expect to make a change to your billing platform? 60% 53% 50% 40% 30% 31% 20% 10% 0% 4% 5% 5% 3 months or less 3 to 6 months 6 to 12 months A year or more No specific plans but open to considering a change Nearly all respondents are either planning a billing platform change (45%) or open to considering a change (53%). Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

Profile of Responders: Industry Sectors Healthcare Mfg - PrimaryPublic Wholesale Administration 1% 1% Trade 1% 5% Retail Trade Business 5% Services Media 38% 5% Telecom Services 6% Consumer Services Financial 6% Services 18% Mfg - High Transportation 1% Tech 11% Responders represent a wide variety of industries. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

Profile of Responders: Revenue 1.5billion 23% 250 million 53% 500 million 1.5 billion 13% 250 - 500 million 11% 23% of those surveyed work in Fortune 1000 companies with revenues over 1.5 billion. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

Profile of Responders: Job Level Manager CxO 1% 6% Director 56% VP 37% 99% of those surveyed hold director or executive level positions in their organizations. Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.

Oracle Monetization Cloud accelerates time to market for digital, subscription and consumption-based services. Service providers can innovate with flexible pricing capabilities and deliver a compelling customer experience with real-time notifications and personalized offers. Learn more about Oracle Monetization Cloud Summary Results January 2019 Copyright 2019 Gatepoint Research. All rights reserved. This report is the sole property of Gatepoint Research and may not be used, reproduced or redistributed in any form including, but not limited to, print & digital form without express written consent of Gatepoint Research.