Category Archives: SaaS

Digital Marketing Hubs And The Cloud

Digital Marketing Hubs And The Cloud

Digital Market Hubs

Gartner’s recently released research, Magic Quadrant for Digital Marketing Hubs, recognizes the big four marketing cloud vendors as leaders, but also points to many challengers. Adobe, Marketo, Oracle, and Salesforce inhabit the leader’s block of the Magic Quadrant, reflecting both their growing capabilities as well as marketing technology platform scopes. Gartner believes that challengers IBM, Epsilon (Conversant), and Experian Marketing Services are equipped with similar abilities as the top four, and considers RocketFuel, DataXu, Neustar, and MediaMath a few of the visionaries not yet able to deliver at the same scale. Gartner’s final quarter points to niche players and includes Nielsen (eXelate), Sizmek, Marin Software, and Teradata.

The Analysis

risk-management

The Magic Quadrant for Digital Marketing Hubs research suggests that digital marketing hubs offer consistent access to content, audience profile data, messaging, workflow elements, analytics functions, and data collection, manually and programmatically, both online and offline. The various platforms were analyzed according to their ability to cover four areas of capability, including:

  • Mastering audience profiling using a combination of first, second and third-party data sources;
  • Workflow and collaboration tools for end-to-end marketing program management;
  • Intelligent composition for multi-channel marketing activities and automation;
  • Unified measurement and optimization.

The Big Four

While Adobe’s Marketing Cloud platform stands out for its vision, broad range of creative and analytical tools for marketers, cloud-based software delivery, financial strength, and dedication to marketing solutions innovation, the company lost points for its high prices, ongoing integration, and complexity and support around their modular-based Marketing Cloud.

Marketo, meanwhile, was recognized for its extensive set of capabilities for both multi-channel journey mapping and direct marketing use cases, as well as for partner ecosystem and audience management. Ad tech integration, dissatisfaction around pricing and support, and native search engine marketing tools, however, pull the company up short of a perfect product.

Marketing Plan

Oracle’s broad scope of capabilities was also recognized by Gartner, from acquisitions to product integration, big data architecture to workflow. But Oracle’s reliance on acquisition for development was considered a weakness, as well as gaps in their offering which include DSP functions and native multi-touch attribution analytics. Poor customer satisfaction regarding pricing and after sales engagement was Gartner’s final caution to Oracle.

With strengths ranging from intuitive user experiences to cross-cloud forays into sales and service due to its Journey Build features, Salesforce Marketing Cloud rounds off the big four digital marketing platforms well. Gartner highlighted their strong email marketing capabilities, due primarily to their acquisition of ExactTarget, as well as constant investment in product innovation, but inconsistencies in hub adoption, immature data analytics, and concerns regarding declining support quality and pricing suggest room for growth and improvement.

The Digital Marketing Cloud

As digital adoption soars, customer behavior changes, and businesses have to redesign their customer’s journey. Digital marketing platforms are increasingly helping organizations identify, create, manage, and measure these customer journeys, and with the information and insights of big data, the digital marketing cloud is changing how businesses operate as well as how they interact with their customers. Though Gartner recognizes the above mentioned big four as leaders in digital marketing, the challengers, visionaries, niche players, and even novice market entrants are improving the digital marketing landscape and bettering existing business models.

By Jennifer Klostermann

Cloud Traffic Growth And Content as a Service (CaaS)

Cloud Traffic Growth And Content as a Service (CaaS)

Content as a Service (CaaS)

Content as a Service (CaaS) is a relatively new take on content management systems (CMS). While traditional web content management systems like Drupal and WordPress offer one-stop-shop solutions for both creating websites and managing content, CaaS service providers narrow their focus to pure content management, disregarding the output channels such as web, print or mobile application, any of which may be selected for use by the customer.

caas-wordpress

Increasing Cloud Traffic

With projections of high increases in global cloud traffic, including Cisco Global’s forecast that cloud traffic in the Middle East and Africa will quadruple by the end of 2019, Vernon Thaver, CTO of Cisco South Africa, states that, “Cloud is moving well beyond a regional trend to becoming a mainstream solution, with cloud traffic expected to grow more than 30% in every worldwide region over the next five years.” Thaver further remarks that consumers expect “on-demand, anytime access to their content and services nearly everywhere”, and believes this creates a prime opportunity for every sphere of cloud operators. WordPress-as-a-Service is a formidable CMS with a high percentage of websites developed and managed using the open source WordPress platform, but CaaS vendors believe that solutions offering only content management, free of presentation control, will provide a simplified and superior solution that allows greater freedom.

CaaS vs. Traditional Web CMS

content-cms

A few key details set CaaS and traditional web CMS apart:

  • Organized Content: CaaS encourages structured content operating in chunks instead of page blobs, shifting from page-centric web to content-centric web.
  • Detachment Tactics: CaaS separates content presentation from storage and delivery, simplifying the CMS construction so that each piece is responsible for one task.
  • Splitting Content & Presentation: CaaS is entirely separated from design, managing and delivering only the content. The channel and design choices are entirely unrestricted.
  • Cloud: A sub-group of the Software-as-a-Service (SaaS) approach, CaaS moves content from a user’s servers to the vendor’s cloud, and so CaaS users aren’t required to set up, maintain, or scale their own infrastructure.

When to Use CaaS

We’re unlikely to ever master the one-fits-all concept. CaaS performs well in some contexts, but not in others, and though not necessarily ideal for personal blogs or instances in which only a website will be required, the more complex and costlier CaaS CMS outstrips some of the earlier CMS solutions in a variety of situations.

  • Rich Web Apps: React, AngularJS, Ember, and other modern MVC front-end frameworks function well with structured content via APIs.
  • Scheduled Content Creation: With content arriving from multiple sources, uploading into a single unified repository is supported by creating content via API.
  • Content Backend for Mobile Apps: Dynamic in-app content delivery is best performed through CaaS CMS, making it unnecessary to resubmit an app to the marketplace. Moreover, repurposing an existing solution as a backend is often better than building your own.
  • Integration: CaaS CMS’ all provide an API and thus are extremely integration-friendly, thereby simplifying workflows.
  • Multi-Channel: Reusing content across different platforms is easy with CaaS CMS, allowing users to push matching content to mobile apps or a website.

The CaaS market is still fairly young, but a few vendors such as Cloud CMS, Contentful, Osmek, and Prismic are already making waves while open source CMS solutions including Drupal and WordPress have begun to move in the CaaS direction.

By Jennifer Klostermann

How Data Privacy Reform Is Wreaking Havoc In The Cloud

How Data Privacy Reform Is Wreaking Havoc In The Cloud

Data Privacy Reform Is Wreaking Havoc

Nations around the globe are stepping up efforts to better protect the personal data of private citizens. In particular, cross-border data security regulations and legislative reform is on the rise. The laws must evolve in order to mitigate theft, abuse and misappropriation of personally identifiable information (PII), better guard national security interests, and boost local economies. These reforms are all necessary and long overdue.

But as these nations seek legislation-based ways to adequately address how the PII of consumers, customers, employees, partners, and contractors are collected, stored and disposed, we’re also seeing global business strategies and processes being tossed into a sea of uncertainty.

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Cloud computing is an established part of today’s international enterprise IT operational landscape, and adoption will continue rising over the next decade. More organizations of all sizes are turning to SaaS and cloud-based collection, storage and collaboration models to streamline efficiencies and share data easily on multiple devices across international locations. This migration to the cloud has been years, even decades, in the making.

Direct Conflict: Cloud vs. Data Privacy Laws

As we shift to mobile and cloud-centric computing platforms in the workplace, we’re also making it more difficult to ensure the proper control of information and awareness of data flows in and outside of the enterprise network. The very nature of the cloud itself – fluid, centrally located, and available anytime from anywhere – is exactly what is creating new challenges for businesses that must comply with data privacy regulatory changes.

Pulse Check: Ovum Research

To develop a sharper picture of where organizations currently stand on their awareness and preparedness level for coming regulatory changes, Ovum Research surveyed more than 300 international IT decision makers. The results of this global research reveal a disturbing worldwide trend: a majority of enterprise leaders are confused about how new data privacy regulations apply to them, and are unprepared for the consequences of failure to comply.

Location, Location

From a legislative viewpoint, the matter of “where data resides” is critical as these new data privacy rules roll out. The Ovum research underscores that when it comes to the physical location of data, there is uncertainty and confusion.

Until now, a key benefit of the cloud was that businesses no longer needed to concern themselves with the physical location of their data. It was stored off-site, for all to share, as needed. Now, with the European Union (EU), Israel and the United States beefing up regulations with the goal of stopping the flood of data leaks and stolen information, businesses must shift their approach to the cloud in a fundamental way. Suddenly, the location controlling the physical path of data matters.

data-policy

The ability to control access to data and achieve regulatory compliance will heavily depend on the data’s location, a key factor in determining what legislation the data is affected by, and the level of access that should be available. Exerting control over data location is a challenge for many organizations, because most systems do not support the concept of data location being a business-related decision, and especially not cloud-based systems. Making matters worse, the exact definition of “data location” for regulatory compliance purposes varies from region to region. Organizations trying to achieve compliance will need options that offer control over data’s physical, logical, legal, and political location.

We are already seeing legal arguments being made in courts around the world that hinge on the fundamental concept of where data is located and controlled, and who has jurisdiction over that data (an example is the Microsoft case regarding data stored in Dublin, Ireland that is being requested by a US judge).

The Ovum research found that 50 percent of respondents’ organizations planned to change the primary approach to this control challenge during the next three years. This may suggest that organizations are waiting for a standard to emerge, and builds a strong case for an approach to cloud collaboration that provides various technical options, such as the ability to offer controls for physical and logical location.

No Control Over Cloud-based Services

It’s important to note that these data privacy regulations apply to cloud vendors, but they also extend to the individual companies using them. For example, the pending General Data Protection Regulation (GDPR) in the EU specifically targets any business that collects, stores, processes, and shares personal data on employees, customers, or partners. Failure to keep that information within the specific geographic location of the European Economic Area (EEA), whether intentionally or by accident (such as a data breach) will result in significant fines for that company.

Yet, the Ovum research tells us that many organizations are not leveraging available technologies to better protect sensitive data, either in the cloud or on-premise. Only 44 percent of survey respondents said they use technology to monitor user activities and provide alerts to data policy violations, and only 53 percent classify information to align with access controls. Almost half (47%) admitted that they have “no policies or controls” that govern access to consumer cloud storage and file-sharing system like Dropbox. This opens them up to enormous risk.

The Cloud: Here To Stay, But in Need of Better Control

While regulatory changes are wreaking havoc, that doesn’t mean that cloud services will fall out of favor. Just a few years ago, conversations revolved around whether the cloud should be trusted at all. Today, businesses do trust the cloud to protect the most sensitive assets, demonstrating a shift in sentiment toward its positive role in business today. The Ovum survey found that 58 percent of respondents trust the cloud for all business operations, despite the potential impact of pending data privacy regulations, all of which intend to change how data is stored, transferred, and processed around the world.

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(Image Source: Shutterstock)

So, even with the changing regulatory climate, cloud computing is a decision that’s already been made. And yet, regulating cloud-held data is poised to become the biggest challenge facing legal practitioners, politicians, and businesses as they try to balance privacy with access and productivity. The cloud can still work in this new world of data privacy reform, in reality cloud services may be a more appropriate solution to the data sovereignty challenges as cloud vendors are already having to address the sovereignty issues and architect their solutions to address an ever changing landscape.

Enterprises are likely to lean more heavily on cloud vendors to be a part of the bigger solution rather than try to unravel the ever changing requirements single handedly. However, it will need greater control and visibility in each region where companies operate.

By Daren Glenister

 

5 Tips To Host A Successful Conference In The Cloud

5 Tips To Host A Successful Conference In The Cloud

Host a Successful Conference in the Cloud

All thanks to the amazing strides in the field of technology, video conferencing can be conducted in the cloud these days. On the whole, conferencing in the cloud seems to be more flexible and easier to access for business professionals providing them with an excellent platform with ample freedom and lots of opportunities to explore. Although this kind of conferencing may seem extremely simple and easy to conduct, it is advisable to bear in mind some important aspects while conducting it.

video-conferencing

Below are five tips that may come handy when video conferencing in the cloud:

1) Get the entire system updated and always be alert for new updates

You can save considerably while conferencing in the cloud,” says Nitin Pradhan, a former leader in the US Transport industry. Its proven this kind of conferencing not only hikes up productivity for each and every member of the team but also provides excellent connectivity. Common problems which are usually related to the system are usual. This can be averted by ensuring your systems are updated with the most recent version of cloud services. Regardless of what kind of service you may be utilizing, it is imperative the latest version be downloaded. Never take it for granted that all the latest updates will occur automatically.

2) Be prepared with a set of extra batteries if you happen to be using your Smartphone

If you don’t own one of the latest energy efficient smartphones, there is every chance a video conferencing in cloud can use up your battery swiftly, leaving you extremely low on charge even before you finish your session of conferencing,” says Melody Kee, a cloud collaboration expert. In such cases, it would be a wise idea to have a pair of backup batteries in hand before you begin the session to ensure an uninterrupted supply of power in your mobile.

3) Get Rid of Background Apps

Video conferencing calls for switching off all the background apps which are not relevant to the session. It is best to ascertain all apps are off even if the best service providers are providing conferencing services for you. Although anti-virus or firewalls need not be shut down, it is ideal to close even unnecessary word files and web browsers for the entire session of conferencing.

4) Lay Down a Systematic Set of Expectations and Regulations

All the positive aspects of conferencing in the cloud can go for a toss without the aid of a systematic structure of regulations. It is important each and every person is aware of his duties and responsibilities and they get specific instructions about how to deal with communications. For example, you have decided to adopt video conferencing instead of emails, it is necessary to update your staff on the rules or instructions they need to take before initiating such a call.

compliance

(Image Source: Shutterstock)

Even though excellent availability is a wonderful resource which can be utilized to the maximum, there is a risk of unlimited boundaries. Make sure everyone is knowledgeable about when to make use of the conferencing facility and also monitor they use it within the specified limits and guidelines presented by you.

If you are planning to convert the majority of your business dealings via video conferencing using services such as BlueJeans, Lifesize or Webex  it would be ideal if you could provide your employees with specific time slots set aside for conferencing. This will aid in ascertaining their availability to avoid any confusions regarding time. It is also necessary to let the employees to cater to a reasonable time slot for chatting and social use policies.

5) Permit Alterations in Policies

Be prepared to face utter confusion while introducing video conferencing in the cloud for the first time and be ready to answer the concerns your staff may have. It would be ideal if you could draw up the primary set of expectations and policies as a foundation. Check out whether anyone is facing any kind of issues or special concerns which require to be addressed.

With the rapid developments occurring in the field of science and technology, make sure you update each and every aspect right on time.

All the above mentioned factors and tips are certain to ensure you and your entire team will breeze through video conferencing in the cloud without any kind of hassles.

By Glenn Blake

The Transformative Influence Of Cloud Computing

The Transformative Influence Of Cloud Computing

The Influence Of Cloud Computing 

The unprecedented disruptive power of the internet on long-established businesses

The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” This is a quote from the ancient Greek philosopher, Socrates, from thousands of years ago but it’s as accurate today as it ever has been.

The internet, software as a service and the transformative powers of cloud computing has upended traditional business in ways that would have been impossible to comprehend as recently as 15 years ago. Long established industries have been decimated in just a few years, while new empires have risen to take their place.

Music Over The Years

evolve-internetLet’s begin by looking at the music industry as an example. Who would have imagined that gigantic music chain stores like Tower Records or HMV would go the way of the dinosaur in the early 21st Century? Instead, the power has returned to artists who can shape their interaction with consumers and deliver music how and when they want to. Between 2005 and 2010, companies like YouTube, Spotify, iTunes and Deezer all launched and changed the way we consume music forever. And the revolution is only accelerating. In 2011, 60% of music sales were in physical albums, by 2014, that was down to only 46%.

Streaming music, while still not perfect, has cemented its hold as the next platform for the music industry in the foreseeable future.

The retail industry has experienced much of the same thanks in no small part to the explosive growth of one company in particular: Amazon.com. As an example, 1 out of every 4 pounds spent in the UK on entertainment over Christmas was spent on the global giant Amazon. The convenience of online shopping, where items can be searched for, purchased and delivered with just a few clicks of a mouse has led to the ‘death of the high street’, with beloved brands having faced cut backs or liquidation including HMV, Woolworths and Blockbuster.

Growth Of SaaS Applications

It’s not just in entertainment or retail where disruption has been so evident. Think of an industry as established as transport. The growth of software as a service has enabled a company like Uber to flourish and become a global phenomenon in just a few short years. It launched in San Francisco in 2009 and this year, it’s projected to amass a global booking revenue of over $26-billion. That’s astonishing growth. The London Taxi Company closed its door in 2012, and physical map sales are down 30% in the UK, thanks to cloud-services like Google Maps and GPS companies like TomTom.

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Spare a thought for travel agents, who were once the gatekeepers deciding where and when you should go on holiday. Today, the internet has placed that power firmly in the hands of travelers, who use cloud-based services like FlightHub and TripAdvisor to decide where they should go and book their own flights exactly the way they want them. And once you arrive at a destination, your accommodation is not the hotel room that you once were expected to accept sight unseen. Today, hotel rooms exist in the cloud and you go online to services like Airbnb to research and book where you would like to be staying for the night. That’s a radical disruption to a way of doing business that flourished for hundreds of years.

Change is inevitable. We all accept that. But the internet and the explosive growth of cloud-based services which can deliver huge amounts of data and information quickly to small, handheld devices is an unprecedented change which has ushered in a whole new way of working that we are only known beginning to get a grasp of.

By Jeremy Daniel

CES 2016: Welcome To The Future

CES 2016: Welcome To The Future

Welcome To The Future

CES 2016 is hitting its stride in Las Vegas as many the leading global manufacturers’ role out their flagship innovations in the hope of attracting the attention of the international tech media.

Let’s take a further look at some exciting innovations in the cloud and SaaS space.

Of particular interest to a lot of marketers will be the launch of a product which could revolutionize advertising as we know it. Innovative data science and media technology company 4C launched a SaaS TV Synced Product onto market. Essentially, it allows marketers to respond to content in real time with appropriate advertising across multiple platforms.

eMarketer reports that only “10 percent of marketers say their messaging, execution, and delivery are aligned across touch points“. 4C claims that it’s new product can “launch online display banners, video, rich media as well as search and social ads on smartphones, tablets, laptops and desktops within seconds of a specific event or program airing on live TV.”

Imagizer Media Engine

Another cloud application was announced by Silicon Valley image specialists Ambrella, who released the Imagizer Media Engine for app developers who find themselves requiring some form of image processing software. It’s engine is an “on-demand, easy to integrate solution is available on Amazon AWS marketplace, and requires no contracts or long-term commitments. Fees for using this cloud software are simply added to user’s own AWS invoice.

Netflix

While much of the developed world has come to view Netflix as a service that you take for granted, like instant coffee or high-speed internet, for the vast majority of the planet the idea of an efficient, affordable Video-On-Demand service has remained a pipe dream. But all that has just changed.
During Netflix CEO Reed Hastings’ keynote address, he casually announced that Netflix had just been switched on for over 130 countries around the world. Reaction from financial markets was instant, with the Netflix share price closing up 9% on the day.

China still remains out of reach, along with countries like North Korea and Syria where there are laws against US companies operating. But other than that, it’s fair to say that Netflix has flicked the switch and become a global entertainment player, and introduced millions of new customers to the concept of video on demand.

e-Golf Touch

Volkswagen had a bruising 2015 and the company is really going to have to work hard to win back the hearts and minds of consumers. The e-Golf Touch is a step in the right direction. It boasts gesture controls for audio and wireless phone charging, which you’ve probably heard about before. But here’s a few unique concepts that are getting people talking. Firstly, there’s the SIRI-like voice control that lets you start the car by saying “Hello Volkswagen”. And “voice amplification, where the driver and front passenger are picked up by embedded mics and piped over speakers in the rear passenger compartment so it’s easier to carry a conversation.” They’re also launching “Personalization 2.0, which lets a visiting driver customize the car according to settings they’ve got in the cloud. That’s great for ride-sharing.

Old School New Tech

A fusion of old school styling with cutting edge software seems to be the major trend at this year’s showcase. Take Sony’s new PS-HX500 as an example. It’s a simple vinyl turntable that will play your records, while at the same time, “it’s busy converting your beloved vinyl albums into Hi-Res audio files, whether in Sony’s own DSD format or in 24-bit WAV files. From there, you can send the DSD copies on to your Hi-Res-playing Sony Walkman and enjoy a transition from the joys of fully-analog vinyl playback to lossless digital format without any MP3 interference in between.

Tech Partnerships 

All around the conference, some really interesting partnerships began to emerge which signaled a growing maturity amongst leading tech developers. Companies are choosing to focus on doing what they do best and working together with others to maximize their potential for customers who desire efficiency and quality over strict brand loyalty. Microsoft and Volvo, Ford and Amazon, HTC and UnderArmour – these kind of working relationships should deliver great products for consumers in the very near future.

By Jeremy Daniel

SaaS Growth Hacking Do’s And Don’t

SaaS Growth Hacking Do’s And Don’t

SaaS Growth Hacking

Thanks to a few phenomenally successful campaigns and visions of best case scenarios, growth hacking tactics have received a lot of positive attention in recent times. But as the techniques and their results are analyzed it’s becoming apparent that there’s a right and a wrong way to use these tools. Or, at least, there’s a time, a place, and an implementation. Cloud Based Software As A Service (SaaS) companies such as Dropbox, Pinterest, and Airbnb boast a few of the most wildly successful strategies contrived to date (Excellent 2015 Marketing Statistics List), but with the ever-evolving global tech and business climate, ‘old’ tactics aren’t likely to yield positive results without new twists on the invention.

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The Dos

Never again will we see massive success stories that are merely revamps of old hits – unless you’re writing teen vampire novels, in which case give it 10 to 15 years. Video marketing is a trend expected to flourish in 2016, and additionally ensuring your growth hacks account for the massive traffic routed by search engines and social networks could ramp up achievements.

  • A few key points to keep in mind: Match-make growth hacking and products/services: You’re going to need a synergy between the two, ideally with a key representative closely involved in the development of both.
  • Spot trends: All the information you could possibly need is flying about, but Big Data often results in a case of not seeing the wood for all the trees. Learn to extract pertinent points but also know when to back off. Just because you think something rocks, doesn’t mean anyone else is going to care, and a rework is likely to yield better results than soldiering on.
  • Change the way you think: Growth hacking comes into play when traditional marketing methods aren’t likely to succeed. This isn’t the time for crossing your ‘T’s and dotting your ‘I’s. Be creative, think outside of the box, and be willing to take calculated risks.
  • Communicate & Incentivize: Creative doesn’t mean disorganized. Ensure your communication is easily understood and followed by both your team and your potential customers. And then save money by getting your customers to market for you – a little freebie often goes a long way to positive word of mouth and heightened product uptake.

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(Image Source: Shutterstock)

The Don’ts

  • Sadly, there is no growth hacking template or checklist. Strategies and tactics often work only once, and success usually boils down to the right attitude, genuine curiosity, and the ability to try, and fail, adapt, and invent.
  • Popularity alone only survives through high school: Simply creating a buzz isn’t enough. If you’re building products or services that don’t have the end users in mind, no amount of popularity will result in success. Unless you’ve built a pyramid scheme that is, at the very least, frowned upon in many countries, illegal in most. Back to the drawing board, please.
  • Don’t forget about loyalty: Many businesses focus on building up new users before ensuring the satisfaction of the loyal early adopters. Growth hacks that run roughshod over your faithful flock in an attempt to recruit new masses miss the success that personal referrals, word of mouth, and client satisfaction promise.
  • Don’t be aggressive: This isn’t telecanvassing. Aggressive, underhanded strategies trample on your reputation and miss the point of the clever loopholes that drive customer numbers as well as satisfaction.

Unless you’re selling thin in chocolate sauce, your product won’t sell itself: Don’t let the beauty of your growth hack so over-awe you that you forget to measure its success. Analyze your data, find out what’s working, and optimize it. Repeat…

By Jennifer Klostermann

Driving Success: 6 Key Metrics For Every Recurring Revenue Business

Driving Success: 6 Key Metrics For Every Recurring Revenue Business

Recurring Revenue Business Metrics

Recurring revenue is the secret sauce behind the explosive growth of powerhouses like Netflix and Uber. Unsurprisingly, recurring revenue is also quickly gaining ground in more traditional industries like healthcare and the automotive business. In fact, nearly half of U.S. businesses have adopted or are planning to adopt a recurring revenue model, now one of the dominant sales models in today’s connected digital economy.

IoT-DeviceToday, 226 million-plus adults take advantage of online subscription models, and the average consumer spends more than $850 in monthly subscription services, including: auto insurance, cell phone plans, health care premiums, and, of course, household utilities (cable, Internet, etc.). While impressive, these numbers will skyrocket as businesses continue to move towards usage-based services at the core of the Internet of Things (IoT), which is expected to total $8.9 trillion in sales by 2020.

Yet, success isn’t as simple as the plug and play philosophy that some might suggest. Selecting the right technology, business process, and pricing model is just the beginning. Seasoned pros measure performance every step of the way to maximize customer lifetime value and success.

I’ve tapped the experts and asked them to weigh in with their “winning formulas.” Their responses reflected that while there’s a core set of key indicators, there’s plenty of discussion about which “go to” metric best predicts recurring revenue success.

And while there’s no particular order to the core metrics listed below, the importance of each varies with the individual business and its goals. Each is a solid indicator of a healthy (or unhealthy) recurring revenue business. Helping businesses get and stay competitive is the impetus.

Here are six favorite metrics for measuring recurring revenue success:

  • ARB – Annual Recurring Billings
    Formula: The sum of all customers’ annual subscriptions and/or usage

My personal pick is a summation of the expected total yearly billings of your customers’ annual subscriptions and usage fees. ARB is what I call the “true north” because it represents the actual cash flow irrespective of GAAP revenue recognition. All roads lead to ARB, including: annual contract value, renewed bookings, upsells, cross-sells, and retention. It’s essential in understanding your success in building customer relationships.

ARB shows you the big picture over time of how your recurring revenue efforts are performing, but you can also use it more granularly. For example, you can track recurring revenue generated from new sales versus renewals or from upsell/cross-sell. Conversely, you can also apply ARB to monitor losses from downgrades, churn, and so forth.

  • Usage Level Deciles
    Formula: To Calculate a Decile or Any Quantile

Aria Systems’ co-founder, Brendan O’Brien, looks to Usage Level Deciles to make business decisions based on customers’ consumption over time. A decile is simply defined as “any of the nine values that divide the sorted data into ten equal parts, so that each part represents 1/10 of the sample or population.” Correspondingly, Usage Level Deciles look at usage across the entire customer base, and then break everyone into ten groups. With this, you can then graph usage patterns and study how these patterns change over time. “Usage Level Deciles provide actionable insight into whether the customers I am losing, gaining, or keeping use and value the service I provide,” O’Brien says. For example, “you can study churn rates for each decile to gain insights into customer behavior and improve retention. If customers in high usage deciles are churning at accelerated rates, product and customer experience needs to improve. If customers in low usage deciles are churning more frequently, further training and adoption measures might be in order.”

  • Total Contract Value (TCV)
    Formula: TCV = (MRR x # of months) + any one time revenue + any contracted services revenue Or TCV = (ARR x # of years) + any one time revenue + any contracted services revenues

A key metric from Andrew Dailey, Managing Director of MGI Research, measures Total Contract Value (TCV). It is the summation of the values of all contract terms, inclusive of all revenue types and length of term. “TCV is a key financial indicator of a business and a prerequisite for undertaking proper analysis and valuation of a company,” said Dailey.

  • Average Revenue Per Unit (ARPU)
    Formula: ARPU = Total Revenue ÷ # of Subscribers

A metric from Ted Brookbank, Senior Vice President of Advanced Technology Group, determines the average revenue per unit (ARPU). The ARPU is a revenue calculation often used by communications and networking companies and other subscription-based services where users pay varying fees depending on the type of contract and usage. Brookbank says, “ARPU has always been a key benchmark in communications and other services industries because it provides insight into which product lines are profitable and driving growth.”

  • Conversion Rates or CR
    Formula: # of unique trial plan subscriptions ÷ # of unique visitors Or # of paid plan subscriptions ÷ # of unique visitors Or # of upgrades from free trials to paid plans ÷ # of free trial plan subscriptions

Karishma Karnik, Senior Program Manager of HERE, a Nokia company, looks at conversion rates (CR). CR includes the percentage of unique website visitors who sign up for a plan (free or paid) and the percentage of those who sign up for free trials and upgrade. “Conversion rates impact recurring revenue by giving us insight into consumer behavior, the usability of our website, and the popularity of our various product offerings,” Karnik explains.

  • Customer Net Profitability Value, or CNPV
    Formula: CNPV = Revenue – Customer Acquisition Costs

Jeffrey Kaplan, Consultant at THINKStrategies, favors Customer Net Profitability Value (CNPV). It measures the cost of acquisition and retention against the revenue provided by each customer. “CNPV provides a better metric for properly targeting a company’s sales and marketing efforts to attract profitable customers,” says Kaplan.

As noted, an increasing number of businesses are adopting recurring revenue models. They allow customers to have a plethora of options, including more creative packaging, promotions, and delivery of goods and services.

And, while these metrics are valuable, they aren’t created equal. It’s important to understand what the business’ individual goals are and pay attention to metrics specific to measuring against those goals. Choose ones that fit your business model, pay attention to what they tell you, adjust accordingly, and then repeat. Quarter after quarter. Year after year.

For more information and additional metrics, see the corresponding infographic below.

Aria_Recurring-Revenue-Infographic_Final-1-4-15_001-compressor (1)

By Tom Dibble

 

CloudTweaks Comics
Business Analytics Vs Data Science

Business Analytics Vs Data Science

Big Data Continues To Grow Big Data continues to be a much discussed topic of interest and for good reason.  According to a recent report from International Data Corporation (IDC), “worldwide revenues for big data and business analytics will grow from nearly $122 billion in 2015 to more than $187 billion in 2019, an increase…

Choosing IaaS or a Cloud-Enabled Managed Hosting Provider?

Choosing IaaS or a Cloud-Enabled Managed Hosting Provider?

There is a Difference – So Stop Comparing We are all familiar with the old saying “That’s like comparing apples to oranges” and though we learned this lesson during our early years we somehow seem to discount this idiom when discussing the Cloud. Specifically, IT buyers often feel justified when comparing the cost of a…

Cloud Infographic – Big Data Analytics Trends

Cloud Infographic – Big Data Analytics Trends

Big Data Analytics Trends As data information and cloud computing continues to work together, the need for data analytics continues to grow. Many tech firms predict that big data volume will grow steadily 40% per year and in 2020, will grow up to 50 times that. This growth will also bring a number of cost…

Cloud Infographic – Cloud Computing And SMEs

Cloud Infographic – Cloud Computing And SMEs

Cloud Computing And SMEs SMEs (Small/Medium Sized Enterprises) make up the bulk of businesses today. Most cloud based applications created today are geared toward the SME market. Accounting, Storage, Backup services are just a few of them. According to the European Commission, cloud based technology could help 80% of organisations reduce costs by 10-20%. This infographic provided…

Cloud Infographic – What Is The Internet of Things?

Cloud Infographic – What Is The Internet of Things?

What Is The Internet of Things? “We’re still in the first minutes of the first day of the Internet revolution.”  – Scott Cook The Internet of Things (IOT) and Smart Systems are based on the notions of Sensors, Connectivity, People and Processes. We are creating a new world to view and measure anything around us through…

Lavabit, Edward Snowden and the Legal Battle For Privacy

Lavabit, Edward Snowden and the Legal Battle For Privacy

The Legal Battle For Privacy In early June 2013, Edward Snowden made headlines around the world when he leaked information about the National Security Agency (NSA) collecting the phone records of tens of millions of Americans. It was a dramatic story. Snowden flew to Hong Kong and then Russia to avoid deportation to the US,…

Cloud Computing Then & Now

Cloud Computing Then & Now

The Evolving Cloud  From as early as the onset of modern computing, the possibility of resource distribution has been explored. Today’s cloud computing environment goes well beyond what most could even have imagined at the birth of modern computing and innovation in the field isn’t slowing. A Brief History Matillion’s interactive timeline of cloud begins…

Moving Your Enterprise Apps To The Cloud Is A Business Decision

Moving Your Enterprise Apps To The Cloud Is A Business Decision

Moving Your Enterprise Apps Whether it be enterprise apps or any other, if there is any heavy data that is going to be transacted in and through an app, then affiliating it with the Cloud becomes a must. And then an important question arises: How do you decide when to integrate your enterprise app with…

Cloud-Based or On-Premise ERP Deployment? Find Out

Cloud-Based or On-Premise ERP Deployment? Find Out

ERP Deployment You know how ERP deployment can improve processes within your supply chain, and the things to keep in mind when implementing an ERP system. But do you know if cloud-based or on-premise ERP deployment is better for your company or industry? While cloud computing is becoming more and more popular, it is worth…

What Top SaaS Vendors Do To Ensure Successful Onboarding

What Top SaaS Vendors Do To Ensure Successful Onboarding

What Top SaaS Vendors Do I am not going to mention names in this article, but if you want to be the best, you must look at what the best do – and do it better. The importance of investing in SaaS onboarding can be easily overlooked in favor of designing efficient and powerful software…

Digital Twin And The End Of The Dreaded Product Recall

Digital Twin And The End Of The Dreaded Product Recall

The Digital Twin  How smart factories and connected assets in the emerging Industrial IoT era along with the automation of machine learning and advancement of artificial intelligence can dramatically change the manufacturing process and put an end to the dreaded product recalls in the future. In recent news, Samsung Electronics Co. has initiated a global…

Protecting Devices From Data Breach: Identity of Things (IDoT)

Protecting Devices From Data Breach: Identity of Things (IDoT)

How to Identify and Authenticate in the Expanding IoT Ecosystem It is a necessity to protect IoT devices and their associated data. As the IoT ecosystem continues to expand, the need to create an identity to newly-connected things is becoming increasingly crucial. These ‘things’ can include anything from basic sensors and gateways to industrial controls…

How The CFAA Ruling Affects Individuals And Password-Sharing

How The CFAA Ruling Affects Individuals And Password-Sharing

Individuals and Password-Sharing With the 1980s came the explosion of computing. In 1980, the Commodore ushered in the advent of home computing. Time magazine declared 1982 was “The Year of the Computer.” By 1983, there were an estimated 10 million personal computers in the United States alone. As soon as computers became popular, the federal government…

Do Not Rely On Passwords To Protect Your Online Information

Do Not Rely On Passwords To Protect Your Online Information

Password Challenges  Simple passwords are no longer safe to use online. John Barco, vice president of Global Product Marketing at ForgeRock, explains why it’s time the industry embraced more advanced identity-centric solutions that improve the customer experience while also providing stronger security. Since the beginning of logins, consumers have used a simple username and password to…

Three Reasons Cloud Adoption Can Close The Federal Government’s Tech Gap

Three Reasons Cloud Adoption Can Close The Federal Government’s Tech Gap

Federal Government Cloud Adoption No one has ever accused the U.S. government of being technologically savvy. Aging software, systems and processes, internal politics, restricted budgets and a cultural resistance to change have set the federal sector years behind its private sector counterparts. Data and information security concerns have also been a major contributing factor inhibiting the…

The Cancer Moonshot: Collaboration Is Key

The Cancer Moonshot: Collaboration Is Key

Cancer Moonshot In his final State of the Union address in January 2016, President Obama announced a new American “moonshot” effort: finding a cure for cancer. The term “moonshot” comes from one of America’s greatest achievements, the moon landing. If the scientific community can achieve that kind of feat, then surely it can rally around…

Lavabit, Edward Snowden and the Legal Battle For Privacy

Lavabit, Edward Snowden and the Legal Battle For Privacy

The Legal Battle For Privacy In early June 2013, Edward Snowden made headlines around the world when he leaked information about the National Security Agency (NSA) collecting the phone records of tens of millions of Americans. It was a dramatic story. Snowden flew to Hong Kong and then Russia to avoid deportation to the US,…

Moving Your Email To The Cloud? Beware Of Unintentional Data Spoliation!

Moving Your Email To The Cloud? Beware Of Unintentional Data Spoliation!

Cloud Email Migration In today’s litigious society, preserving your company’s data is a must if you (and your legal team) want to avoid hefty fines for data spoliation. But what about when you move to the cloud? Of course, you’ve probably thought of this already. You’ll have a migration strategy in place and you’ll carefully…

Ending The Great Enterprise Disconnect

Ending The Great Enterprise Disconnect

Five Requirements for Supporting a Connected Workforce It used to be that enterprises dictated how workers spent their day: stuck in a cubicle, tied to an enterprise-mandated computer, an enterprise-mandated desk phone with mysterious buttons, and perhaps an enterprise-mandated mobile phone if they traveled. All that is history. Today, a modern workforce is dictating how…