ServiceSource Acquires Scout Analytics: Consumption Monitoring Becomes Core Piece of Recurring Revenue Management
Last year TSIA executives released a new book, “B4B: How Technology and Big Data Are Reinventing the Customer-Supplier Relationship,” which discussed the realities of the cloud economy, and exposed just how ill prepared most (all?) technology firms are for the new revenue models emerging in a post-onpremise world. An underlying theme in B4B is that to be successful, technology firms can’t just sell products anymore. And it isn’t enough to just provide services to get the product up and running. That worked when companies were buying onpremise tools, paying 100% of the product cost up front. Whether they were successful or not, the vendor had their money for the deal. As my first startup CEO said to me once when I pushed for a product enhancement with huge CSAT implications, “The customer doesn’t get a vote. Their check has cleared.”
In a cloud economy, the customer gets to vote. One way they vote is by paying a monthly rental fee for your products, and if they don’t like the product, they don’t pay the fee. If you aren’t delivering value, you won’t have customers sticking around for long. A fundamental shift is occuring: technology firms have to become experts very fast on exactly how customers are consuming their technology. What are normal usage patterns for customers who have used the tools 30/60/90 days? For 12/24/36 months? Where are customers struggling to follow normal process flows? What sort of ROI is the technology delivering, and how are customers calculating this? What additional business value could be unlocked if customers used an additional feature, or rolled out the tools to the entire enterprise? Armed with this consumption information, technology vendors must begin to analyze adoption and usage and work closely with customers to provide services that enable and guarantee positive business outcomes.
Bottom line: A core piece of managing recurring revenue in a cloud economy is consumption analytics.
Today’s announcement that ServiceSource was acquiring Scout Analytics is an excellent proof point in this market evolution. ServiceSource, a long time TSIA partner, provides tools and services to manage recurring revenue, with expertise in both onpremise renewals, i.e., traditional maintenance contracts, as well as Software as a Service subscriptions sales and contract renewals. They offer a full SaaS platform (Renew OnDemand) which includes contract/entitlement management and automated renewals. In fact, if successful renewals management is not in your company DNA, ServiceSource is happy to manage your renewal business for you as a service, which they do for some very large tech companies.
I was first introduced to Scout Analytics last April. They joined our partner program just as I was searching for vendors who specialize in consumption analytics–and there are very few. I naively thought that while monitoring consumption of onpremise technology was difficult, it would be a breeze with cloud tools. Every click is recorded on your servers and available for analysis, right? Wrong. It turns out that many cloud vendors are just as in the dark about how customers navigate and consume their online technology as their onpremise counterparts. Scout Analytics produces impressive reports and dashboards measuring customer consumption, helping you understand things like average time to complete a process, most common process flows (helpful to know where to place help options or advertising), as well as general information on volume of users and adoption rates by account.
Combining the two companies creates a powerful and unique offering. Bringing together ServiceSource’s Renew OnDemand platform, which manages renewal sales, integrating to ERP, CRM, and a dozen contracts databases if necessary; with Scout Analytics’ predictive analysis tools for usage monitoring and subscription billing; means the merged companies support–and enable–the entire subscription customer lifecycle. While my focus is B2B technology, clearly this also has huge implications for digital media firms–monetizing clicks is big business.
I will also have some good spending data on this technology very soon–my 2014 Member Technology Survey launches in March, and will include 2 new categories: Consumption Analytics and Recurring Revenue Management. So stay tuned.
Congratulations to both companies on the announcement! And as always, thanks to you for reading!Technology comment below, or link to this permanent URL from your own site.